Preamble

The House met at a Quarter before Three of the Clock, Mr. SPEAKER in the Chair.

PRIVATE BUSINESS.

Private Bills [Lords] (Standing Orders not previously inquired into complied with), Mr. SPEAKER laid upon the Table Report from one of the Examiners of Petitions for Private Bills, That, in the case of the following Bill, originating in the Lords, and referred on the First Reading thereof, the Standing Orders not previously inquired into, which are applicable thereto, have been complied with, namely:

Southend Water Bill [Lords].

Bill to be read a Second time.

Provisional Order Bills (Standing Orders applicable thereto complied with), Mr. SPEAKER laid upon the Table Report from one of the Examiners of Petitions for Private Bills, That, in the case of the following Bill, referred on the First Reading thereof, the Standing Orders which are applicable thereto have been complied with, namely:

Ministry of Health Provisional Order (Dover Extension) Bill [Lords].

Bill to be read a Second time Tomorrow.

Lancashire County Council (Drainage) Bill,

As amended, considered; to be read the Third time.

Preston's Divorce Bill [Lords],

Read a Second time, and committed.

Glasgow Corporation Order Confirmation Bill,

Ministry of Health Provisional Orders (No. 6) Bill,

Pier and Harbour Provisional Orders (No. 2) Bill,

Read the Third time, and passed.

Oral Answers to Questions — INDIA.

OFFICERS' PAY AND ALLOWANCES.

Lieut.-Colonel Sir F. HALL: 1.
asked the Secretary of State for India when he will be able to state what steps are to be taken to remedy the present condition in India under which the rupee rates of pay of British service officers in India are less than the home rates of pay and allowances converted at the current rate of exchange?

Lieut.-Colonel CROFT: 5.
asked the Secretary of State for India whether he is aware that there is a feeling of discontent amongst all British service officers in India on account of the new rate of pay having been fixed on the assumption that the rupee was not going to fall below a 2s. rate; whether the Civil Service are at present drawing over 8 per cent. on their pay as exchange compensation; whether exchange compensation was given to military officers for two months and was then withdrawn and a refund demanded; and why exchange compensation is granted to the Civil Service and is denied to serving military officers?

Colonel Sir C. YATE: 6.
asked the Secretary of State for India whether his attention has been called to the statement in the Indian Press of 29th April that a married officer of the British service in India of about 10 years' service finds himself just over £100 worse off than an officer in similar circumstances at home; and whether the Government of India will now grant to all British married officers of the Army in India the same allowances that have been granted to married officers of the British Army at home?

Major McMICKING: 18.
asked the Secretary of State for War whether he is aware that, owing to the fall in the exchange value of the rupee, married British service officers in India are in a worse position financially than when serving at Home; whether the exchange value of the rupee was approximately 2s. when Army Instruction (India), No. 914, dated 21st October, 1919, was issued; and whether action will be taken to safeguard the financial position of all British service officers in India?

The SECRETARY of STATE for INDIA (Mr. Montagu): Owing to the fall in exchange, the sterling value of the rupee pay of certain classes of British service officers in India is at present less than the home rates. I have considered the various suggestions made to meet the situation, and have consulted the Government of India. They do not recommend the adoption of any of them, and, given a good monsoon, there is reason to hope for an improvement in exchange. I have considered their views most carefully in Council, and concur in their decision.

Major McMICKING: Were the Government, when they sanctioned the new rates of pay in 1919, guided by the rate of exchange current at that time?

Mr. MONTAGU: I cannot say that off-hand. Of course, the hon. and gallant Gentleman knows that the exchange has fluctuated in a way that nobody could have foreseen some years ago.

Major McMICKING: Is it not the case as regards the pay of British non-commissioned officers and men that the value of the rupee is calculated at a fixed rate in sterling?

Mr. MONTAGU: Yes.

Major McMICKING: If that be so in respect to non-commissioned officers and men, why cannot the same principle be applied to officers.

Mr. MONTAGU: Perhaps my hon. and gallant Friend will put down a question on that subject, and I will give him a considered reply.

NEWSPAPERS (GWALIOR STATE).

Sir C. YATE: 8.
asked the Secretary of State for India whether his attention has been called to the statement in the "Leader" newspaper, of Allahabad, that the Gwalior State has prohibited the sale and distribution within the territory of His Highness the Maharaja of the following newspapers: the "Kesari," "Amrita Bayar Patrika," "Mahratta," "Bombay Chronicle," "Independent," "Pratap," "Rajasthan," and "Sahasa," and, considering that these papers are published in British India, will he state what action has been taken by the Government of India against these newspapers in support of the loyal action of His Highness the Maharaja; whether the Government of India has accepted the
resolution of the Legislative Assembly to appoint a committee to examine the Indian Press Act of 1910, and to recommend modifications of the existing law in regard to liberty of speech and writing; and, if so, will the Press Act Committee consider the views of Indian princes in the matter of granting further freedom to the Press in India?

Mr. MONTAGU: I have seen a reference in the Indian newspapers to the Gwalior Prohibition. The Governments in British India have not, to my knowledge, taken any steps recently against the papers named. The Committee appointed to consider the Press laws has finished its sittings, and is on the point of presenting its report. The Committee took into consideration the connection between the Press laws and the native States.

CIVIL SERVICES (PENSIONS).

Sir C. YATE: 9.
asked the Secretary of State for India whether his attention has been called to the widespread desire expressed in the Indian Press amongst the members of the Civil Services of India to take advantage of the proposals of the Government of India, in their letter of 5th March, 1919, regarding proportional pensions for those to whom service under the reform scheme is not congenial, but who cannot apply for permission to retire till they know the conditions of retirement that will be open to them; and will he therefore now inform the Government of India of the pensions considered by him to be suitable to the various periods of service, as recommended in Clause 36 of the Report of the Joint Select Committee of 17th November, 1919?

Mr. MONTAGU: I have seen correspondence in the Press. The whole question has for some time been engaging the attention of my Council and myself, in consultation with the Government of India, but is not yet finally settled.

Sir C. YATE: When will it be finally settled?

Mr. MONTAGU: I hope in the course of the next week or so. I recognise it is a very urgent question, and am doing my best to expedite it.

Sir C. YATE: I will put down another question.

Oral Answers to Questions — GOVERNMENT STAFFS.

WAR OFFICE (INFORMATION SECTION).

Colonel ASHLEY: 12.
asked the Secretary of State for War what is the essential work now being carried on by the publicity department of the War Office?

The SECRETARY of STATE for WAR (Sir Laming Worthington-Evans): The Information Section of the War Office is responsible for dealing with the very numerous and varied communications on military matters which are received from and through the Press, both lay and professional. My hon. and gallant Friend, who has himself worked in the War Office, does not need to be reminded of the continued interest evinced by the public in Army affairs, and this is reflected in the desire of the Press to obtain prompt and accurate information. I see no likelihood of any abatement of this work while the commitments of the Army are so widespread. The dissemination of information about the Army is likewise an important factor in the solution of the problem of voluntary recruiting. The Information Section is also responsible for the control of all Army advertisements, and their technical knowledge has enabled us to effect considerable economies which more than cover the cost of the staff. I have under consideration proposals designed to reduce the cost of the section without impairing its efficiency, and if my hon. and gallant Friend will put a further question on the Paper in a week or two's time, I shall hope to be able to give him further information.

Colonel ASHLEY: Did not the Army do quite well without a publicity department before the War, and may I ask whether the right hon. Gentleman will not follow the example of the Board of Trade, which has done away with its publicity department, and it really needed it more than the War Office?

Colonel Sir J. GREIG: Had we not before the War very great difficulty in keeping our recruiting up to full strength owing to the absence of such a department?

Major C. LOWTHER: What is the personnel of the staff engaged on this work?

Sir L. WORTHINGTON-EVANS: I must have notice of a detailed question of that sort. In reply to my hon. and gallant
Friend (Colonel Ashley), I am satisfied that the information department is really saving money and is efficient, but I am looking into it with a view to see if I cannot reduce the expenditure.

Captain GEE: Would the right hon. Gentleman consider the advisability of extending the scope of the publicity department to enlighten the non-commissioned officers and men of the Army as to the revolutionary propaganda that is being carried on in their midst in barracks?

HOME OFFICE (FACTORY DEPARTMENT).

Sir W. DAVISON: 29.
asked the Secretary of State for the Home Department whether a new scheme for the reorganisation of the Factory Department of the Home Office is at present under consideration which will entail the creation of many new districts with consequent increases in staff, as well as large increases in administrative expenditure; what is the reason for the proposed reorganisation; and what is the estimated additional expense which will be entailed thereby?

The UNDER-SECRETARY of STATE for the HOME DEPARTMENT (Sir John Baird): A scheme for the reorganisation of the Factory Department was settled last year, and particulars were issued in the Press last August. The scheme provided for an increase in the number of inspection districts, but this, while it involved some re-grading, has not involved an increase in the staff. The increase in the number of districts was a measure of decentralisation, which was rendered necessary by the increase in the number of factories and workshops and the great growth of the duties devolving on the Inspectorate, and it will have the effect of bringing the district inspectors into closer relations with the factories in their districts, reducing the amount of time and money spent in travelling, and relieving the congestion which had arisen in the lower ranks of the Inspectorate. I cannot say precisely what will be the financial effect of the scheme, as, apart from, the scheme, a long overdue improvement in the scales of salaries has taken effect. On the other hand, there may be, as I have said, a considerable saving in travelling expenses, and it may be decided, in the interest of economy, not to fill up all the vacancies in the staff as was contemplated when the scheme was settled.

Sir W. DAVISON: Do I understand that the Department is proceeding with this scheme which was arranged for more than a year ago in view of the recent circular to all the Government Departments asking them to substantially reduce expenditure?

Sir J. BAIRD: We are proceeding with the scheme. The circular did not pick out any particular branch, and this is one of the very last things we should economise upon, because it is a question affecting the safety of the working people.

Sir W. DAVISON: Will this scheme not involve additional expenditure which should not now be incurred?

Sir J. BAIRD: If my hon. Friend will read my answer, he will see that we do not anticipate any further increase of expenditure. In order to keep the expenses down, we shall not fill all the vacancies.

MINISTRY OF HEALTH AND POST OFFICE (BOYS).

Major BIRCHALL: 55.
asked the Chancellor of the Exchequer what are the wages, including bonus, if any, paid to hoys of 14 to 15 employed by the Government in the Ministry of Health and the Post Office; and what wages are paid to hoys of the same age employed in the District Messenger Service?

The FINANCIAL SECRETARY to the TREASURY (Mr. Hilton Young): The wages, including bonus, of boy messengers, aged 14 to 15, employed by the Post Office in London are at present 21s. 3d. a week. One boy messenger of this age is employed in the Ministry of Health, at a wage, including bonus, of 23s. 11d. a week. These amounts will be subject to a substantial reduction on 1st September next. I am not in a position to state what wages are paid to boys of the same age in the District Messenger Service.

Major BIRCHALL: Would it surprise the hon. Member to know that the boys in the District Messenger Service get wages of 9s. rising to 11s. at the age of 15 years? Why is it necessary to pay boys in Government offices doing similar work twice as much and even more?

Mr. YOUNG: I am not in a position to know exactly what are the wages and
conditions of working in the District Messenger Service, and I should require to investigate the conditions before I could reply to the question.

Colonel ASHLEY: Is the hon. Gentleman aware of the great indignation amongst agricultural labourers with a wife and large family to support in view of the enormous sums paid to boys by Government Departments?

Sir J. BUTCHER: Why should not the wages be revised before September next.

Mr. YOUNG: My hon. and learned Friend has evidently not borne in mind the answer I gave on that subject not very long ago, namely, that the dates of revision are fixed in the terms of the original agreement for the War bonus?

Mr. HODGE: Is there any reason why the Government should sweat boys because private companies do so?

Mr. SPEAKER: That is arguing the question.

MINISTRY OF HEALTH (WALES).

Mr. HAYDN JONES: 79.
asked the Minister of Health whether he will state the total number of persons employed in Wales by his Ministry for the years ended March, 1914, and March, 1921, respectively; also the sums respectively paid in salaries and costs of administration for the same periods?

The MINISTER OF HEALTH (Sir Alfred Mond): The total number of perons employed in the Welsh Insurance Commission in 1914 was 247, and the total cost £36,025. In 1921 the number was 279, and the cost £84,104, the work on various health services in Wales which was done in 1914 in the Local Government Board having been transferred to the Welsh Board of Health, in pursuance of the Ministry of Health Act, 1919. A temporary staff is also employed in Wales on housing administration, the numbers in March last being 71, and the total cost £22,000.

Oral Answers to Questions — BRITISH ARMY.

COMMANDS (STAFF OFFICERS).

Colonel ASHLEY: 13.
asked the Secretary of State for War why it is essential for the efficiency of the public service that 1,421 officers should be employed on
the staff of commands in 1921–22, in view of the fact that only 519 were so employed during the early months of 1914?

Sir L. WORTHINGTON-EVANS: The increase in the number of officers at present employed on the staff of commands, as compared with the number in 1913–14, is almost entirely accounted for by the existing conditions in Ireland and by the numbers required for the British forces stationed in the various countries throughout the world, e.g., Germany, Mesopotamia, Egypt and Palestine, Constantinople. These forces, of course, had no counterpart before the War.

Colonel ASHLEY: Does not the answer of the right hon. Gentleman embody a strong argument for reducing our commitments in Palestine, Mesopotamia, and Constantinople?

Sir L. WORTHINGTON-EVANS: That is not the question.

CHAPLAINS.

Colonel ASHLEY: 14.
asked the Secretary of State for War why 300 Army chaplains are needed in 1921–22 to look after an establishment of 201,000 of all ranks, excluding India, whereas in 1914–15 only 117 chaplains were required for an establishment of 184,000?

Sir L. WORTHINGTON-EVANS: The pre-War establishment of 117 Regular Army chaplains did not include those civilian clergymen, 40 or 50 in number, who were engaged to give their whole time to work amongst the troops and were paid the minimum rate for commissioned chaplains. These are included in the establishment of 300 for the Royal Army Chaplains Department shown in the Army Estimates for 1921–22. This figure represents the maximum number which may be employed, but on the 1st June the number had fallen to 260 and further reductions are being made. The scattered distribution of garrisons at home and abroad necessitates the employment of a larger proportion of chaplains than before the War.

Colonel ASHLEY: Then making all the allowance that the right hon. Gentleman does in his answer, how is it that we have now got 100 more chaplains than before the War?

Sir L. WORTHINGTON-EVANS: It is largely due to the number of garrisons all over the world, and to the scattered nature of those garrisons.

Colonel ASHLEY: May I take it that it is the War Office policy as soon as possible to come down to pre-War conditions?

Sir L. WORTHINGTON-EVANS: The War Office policy is to cut down any expenditure that is not absolutely necessary and this is an expenditure that I hope will be reduced.

Sir J. D. REES: Does the Army need praying for more than formerly, or what: is the reason?

Mr. ROSE: Does the right hon. Gentleman think that the moral and spiritual state of the Army justifies this very large expenditure on preaching?

Viscountess ASTOR: Arising out of that—

Mr. SPEAKER: We appear to be getting into a Debate

GENERAL STAFF.

Lieut.-Colonel W. GUINNESS: 15.
asked the Secretary of State for War whether he is aware that there are now employed in the Department of the chief of the Imperial General Staff at the War Office, 1 deputy-chief of the Imperial General Staff, 3 directors, 5 deputy-directors, 89 general staff officers, and a major-general, a total of 99, as against 3 directors and 60 general staff officers employed prior to the outbreak of war in 1914; and whether he can explain why, now that the War is over, there is still this inflation of 57 per cent, in the number of officers of these grades employed at the War Office?

Sir L. WORTHINGTON-EVANS: The question of reduction of the number of officers employed on the general staff at the War Office is amongst the questions now under review by the Army Council in their endeavours to reduce expenditure. The addition over pre-War establishment of 36 officers is mainly due to the greater work thrown on the Army by the greater responsibilities they are carrying in the Middle East, Silesia, Ireland and elsewhere.

PENSIONS (PREVIOUS SERVICE).

Sir W. DAVISON: 17.
asked the Secretary of State for War if he will inform the House of the reason of the War Office Regulation which precludes previous service in the Royal Marines or Royal Navy from being counted towards pension by an officer now serving, or who has served in the Army or Air Force, although previous service on the civil side at the Admiralty counts for pension in the case of a civil servant transferred from the Admiralty to the War Office; and whether he will communicate with the Lords of the Admiralty with a view to service in any branch of His Majesty's forces being recognised as though the service had been in one of such forces only, so that the present anomalous position may be remedied.

The FINANCIAL SECRETARY to the WAR OFFICE (Lieut.-Colonel Stanley): My hon. Friend is not comparing like with like. The case referred to in his previous question is that of a man who had served in, and been discharged from, the Marines, and subsequently enlisted in the Army. Such a case could hardly arise in the Civil Service; but if it did, I should be much surprised if the service before discharge were allowed to count under the second engagement. If a man transfers while serving, from the Marines to the Army, he would count his service. That would be analogous to a civil servant transferred from the Admiralty to the War Office or vice versa. There is a very definite reason for the Regulation. In a short-service Army, what we want are men who will serve seven years with the Colours and then five years in the Army Reserve, without becoming pensionable. Men who bring with them on entry a long period of service given in some other force do not make the Reservists we want, but make the pensioners whom, in view of the already very heavy pension charges of the Army, we cannot afford. Such men are therefore taken only on the condition that their previous service will not count. It should be remembered that enlistment is voluntary.

Sir W. DAVISON: Am I to understand that it is only when the service in the Marines or the Navy has actually terminated that it does not count for a pension?

Lieut.-Colonel STANLEY: If the service is continued in any other branch of the service it does not matter.

MEDALS AND CLASPS (ARMY COUNCIL).

Captain TUDOR-REES: 19.
asked the Secretary of State for War whether he is now in a position to announce the decision of the Army Council with regard to the claim of the Devon Territorials to the 1914–15 Star; whether he is aware that over a year ago a deputation of Devon Members interviewed the then Secretary of State for War on the matter; that that Minister promised to give the claims immediate attention; that a month or so later the matter was referred to a tribunal on hard cases presided over by Earl Cavan; that certain hon. Members appeared before them and dealt with the case; that that tribunal promised to make their recommendations to the Army Council forthwith; that ever since, question after question has been asked in this House, and the reply has always been that the matter was still before the Army Council; whether he will now state the reason for the long delay; and when, if he cannot give it now, the decision will be announced?

Sir L. WORTHINGTON-EVANS: I greatly regret that no decision can be announced. The subject of the grant of medals and clasps raises a number of complex and delicate issues, but I hope that the conclusion of our deliberations will be reached shortly.

Captain TUDOR-REES: This question has now been dragging on for over two years, and is the right hon. Gentleman not able to tell us approximately, at any rate, when the announcement will be made, and can he state the real reason for the delay?

Sir L. WORTHINGTON-EVANS: I do not want to make any mystery about it. The reason is that it is an extremely difficult question to deal with. This question of clasps and medals has very intricate consequences, and the Army Council have been considering it, and they are still considering it.

Mr. HURD: In view of the large number affected, would it not be well to call in somebody to help the Army Council?

Sir L. WORTHINGTON-EVANS: The Army Council has been advised by a Committee, but on the question of clasps alone, if one set of decisions is come to it means 24,000,000 clasps, a thing not lightly to be undertaken.

Lieut.-Colonel CROFT: This question deals with the 1914 star and surely a decision can be come to one way or the other?

Sir L. WORTHINGTON-EVANS: I can assure my hon. and gallant Friend that there is nothing else but a desire to be absolutely fair to all branches of the Service, and I do not want to come to a piece-meal decision. I want to review the whole question and decide it as a whole.

Captain TUDOR-REES: If I put another question down in a fortnight, will the right hon. Gentleman then be able to give me a reply?

Sir L. WORTHINGTON-EVANS: I should hate to have to give the same reply again in a fortnight. Perhaps the hon. and gallant Gentleman will postpone it for a month or two.

Captain TUDOR-REES: Shall I put the question down again in a month?

Sir L. WORTHINGTON-EVANS: Yes.

HORSE TRANSPORT FROM BEIRUT.

Mr. ERSKINE: 21.
asked the Secretary of State for War whether an offer has been received from a shipowner offering to transport a minimum of 10,000 horses from Beirut to France, England, or Belgium, at an inclusive charge of £25 per head; and whether in the interests of economy and humanity, that offer will be accepted forthwith?

Sir L. WORTHINGTON-EVANS: A letter has been received and further inquiries are being made.

Mr. LAWSON: Do I understand that serious consideration is being given to this offer which means a cost of £250,000? Is that the interests of humanity or the shipowner?

Sir L. WORTHINGTON - EVANS: Serious consideration is being given to this question, and both the humane and economic considerations will be taken
into account. If it is humane and economic to accent this offer, it ought to be accepted.

Major Sir B. FALLE: Will the right hon. Gentleman consider the advisability of taking them to India instead of bringing them to Europe?

Sir L. WORTHINGTON-EVANS: I cannot make any statement to-day. This offer is to bring horses from Beirut which is 1,100 miles from where the horses are, and on the face of it we could not possibly accept it. I am making inquiries to see if a nearer port could be obtained.

HORSE DESTRUCTION, MESOPOTAMIA.

Colonel BURN: 22.
asked the Secretary of State for War if he will give the actual number of horses of the British troops in Mesopotamia that were recently destroyed by order; and by what means and under whose supervision were they destroyed?

Sir L. WORTHINGTON-EVANS: During the period from 1st January, 1921, to 31st May last (the latest date for which such information is at present available), 4,572 horses, 1,794 mules, and 43 bullocks were destroyed in Mesopotamia. All of these animals were unfit either for retention or sale. I have no special information regarding the latter part of my hon. and gallant Friend's question, but the ordinary method of destruction, which was, doubtless, followed, would be by shooting the animals, and this would be carried out under the supervision of the Army Veterinary Service.

Colonel BURN: Will the right hon. Gentleman ascertain by what method they were killed and not leave it to chance?

Sir L. WORTHINGTON-EVANS: It is not left to chance. The Army Veterinary Service officers are there, and I am certain that we can rely upon them carrying out the destruction in the most humane fashion.

PRE-WAR PENSIONERS (WAR SERVICE).

Mr. F. THOMSON: 23.
asked the Secretary of State for War whether, seeing that certain British pre-war pensioners served during the War in Dominion forces, and that Army Order 325 of 1919 only provides for the re-assessment of pension of those pensioners who re-en-
listed and rendered satisfactory colour service with British forces during the War, the provisions of the said Order can be extended to those British pre-War pensioners who enlisted and rendered satisfactory service with Dominion forces during the War?

Lieut.-Colonel STANLEY: It has been decided that, in the case of both officers and other ranks, service during the late War with a force serving under the British flag should count for re-assessment of pension as if the service had been rendered with the British forces.

GRETNA FACTORY.

Major W. MURRAY: 24.
asked the Secretary of State for War whether he is yet in a position to announce a decision as to the future of the national factory at Gretna?

Sir L. WORTHINGTON-EVANS: His Majesty's Government have decided to dispose of the factory at Gretna.

Major MURRAY: Will any opportunity be given on the Estimates to discuss this very large and important question?

Sir L. WORTHINGTON-EVANS: I think so. The Army Estimates will probably come before the House again, and I suppose an opportunity will be given then.

Major MURRAY: May I ask—

Mr. SPEAKER: The hon. and gallant Member has had a very full answer.

TANKS (ENGINES).

Lieut.-Commander KENWORTHY: 11.
asked the Secretary of State for War whether engines for use in tanks at the headquarters of the Tank Corps at Ware-ham and at Bovington are, upon the delivery from the makers, broken up and passed on to the Slough Trading Company, who claim them as surplus under the terms of their contract?

Sir L. WORTHINGTON-EVANS: There is no foundation whatever for the suggestion contained in the hon. Member's question. No engines for use in tanks have been delivered to the Tank Corps from the makers since May, 1919.

DEFENCE CORPS (PAY AND MARRIAGE ALLOWANCE).

Major W. MURRAY: 20.
asked the Secretary of State for War whether the
issue of full pay and marriage allowance to officers and men of the Defence Corps, who are upon indefinite leave for the purpose of following their professions or ordinary occupations, can now be discontinued, seeing that prior to the War members of the Territorial Force did not receive pay when absent from duty or camp?

Lieut.-Colonel STANLEY: This question has been very carefully considered, and I am unable to adopt this suggestion. The circumstances of the Territorial Force in normal times are not similar.

Major MURRAY: Is the hon. and gallant Gentleman aware that a number of these men who are carrying on their ordinary occupations are quite averse to receiving more Army pay, and do not understand why it is paid to them at all?

Lieut.-Colonel STANLEY: They are liable to be recalled at any moment.

WEST INDIES.

Mr. GIDEON MURRAY: 25.
asked the Secretary of State for the Colonies what is the present position with regard to the direct mail steamer communication between Great Britain and Trinidad and the adjacent West Indian Colonies; and whether an early arrangement will be reached to re-establish a regular direct service?

The UNDER-SECRETARY of STATE for the COLONIES (Mr. E. Wood): The present position is set out in my reply to my hon. Friend the Member for Frome on 31st May. When His Majesty's Government have decided upon the question of a contribution from Imperial funds, the possibility of reaching an early arrangement will depend upon the tenders received from shipping firms.

Mr. G. MURRAY: 26.
asked the Secretary of State for the Colonies whether he is aware that the Air Minister has certain airships at his disposal; and whether he will, in consultation with the West Indian Aviation Committee, consider the desirability of securing these airships for utilisation in connection with transport services in the West Indies?

Mr. WOOD: The answer to the first part of the question is in the affirmative. I should be pleased to discuss with the
West Indian Aviation Committee the possibility of using airships to improve communications in the West Indies. At the same time, I must point out that these large craft are not suitable for communication over comparatively short distances, and would in any case be uneconomical, if not actually impracticable, owing to the very large overhead charges involved for sheds and mooring masts.

Lieut.-Colonel Sir S. HOARE: 27.
asked the Secretary of State for the Colonies whether the proposal to lay new cables from Bermuda to Barbadoes, Trinidad, and British Guiana will immediately be carried into effect; and what steps are being taken to ensure the use of British wireless for British Honduras?

Mr. WOOD: As a result of inquiries regarding the cost of carrying out the proposal for a new cable from Bermuda, it has been thought desirable to suspend negotiations in the hope that the total cost of the scheme to the West Indian Colonies and to His Majesty's Government may be substantially reduced in the near future. Improvements are being effected in the wireless station in British Honduras with a view to ensuring direct communication with the naval station in Jamaica.

Lieut.-Colonel ARCHER-SHEE: Is the hon. Gentleman aware that the State-owned cable to Australia has been an enormous financial success; and cannot the Government come forward and help the communications of the Empire more liberally?

Mr. WOOD: I can assure my hon. and gallant Friend that the Government are anxious to do everything they can in the direction he suggests. The whole matter is at present under review.

INCREASE OF RENT (RESTRICTIONS) ACT.

Sir J. BUTCHER: 31.
asked the Home Secretary whether his attention has been called to the judgment of Lord Justice Banks in the recent case of Remmington v. Larchin in which he says that there is no section of the Increase of Rent and Mortgage Interest (Restrictions) Act, 1920, which does not create difficulty: whether he is aware that in the opinion
of the most experienced county court judges the Act requires considerable amendment; and whether, in view of these expressions of authoritative opinion, he will appoint a Select Committee to inquire into the working of the Act and to make recommendations for its amendment?

Sir A. MOND: I have been asked to reply. My hon. and learned Friend will recollect that the Act of last year was based upon the recommendations of a Committee presided over by Lord Salisbury and including one of the most experienced county court judges among its members. I should doubt whether anything would be gained by the appointment of another committee at the present time.

Sir J. BUTCHER: Has the right hon. Gentleman any information as to the views of county court judges on the question? Can he answer the first part of my question?

Sir A. MOND: My attention has not been called to this judgment and I have not had time to look at it.

Sir J. BUTCHER: Will the right hon. Gentleman look at it, and reconsider the matter in the light of that judgment?

Sir A. MOND: I will certainly look it up.

CENSUS PAPERS (ADVERTISEMENT).

Captain Viscount CURZON: 35.
asked the Home Secretary whether the new Census forms are being sent out with a covering slip containing an advertisement for the hon. Member for South Hackney; whether this was done with his approval; and is he aware that there is, in consequence, considerable danger of the character of the document being mistaken?

Sir A. MOND: As I have already stated in reply to a similar question by the hon. Member for Rother Valley, the document is not a form to be filled up, but simply a leaflet which had to be issued notifying the change of dates resulting from the postponement of the Census. I was advised that I could provide for the whole cost of that postponement by letting the back of the leaflet for an advertisement to be contracted for by the Stationery Office. The result has in fact been to relieve the taxpayer of the whole cost.

Viscount CURZON: Does the right hon. Gentleman not think the covering slip was liable to be mistaken for an advertisement for "John Bull," and therefore put into the waste paper basket?

Sir A. MOND: I should not think so.

Captain ELLIOT: Is it not the case that by this means the hon. Member for South Hackney got the advertisement for his paper delivered at every house for the cost of one farthing, whereas the Postmaster-General would have charged him 1d? Is that consistent with anti-waste?

Viscountess ASTOR: Is it not rather expensive economy?

Sir A. MOND: I fail to see why.

PARISH COUNCIL ELECTIONS.

Mr. ALFRED DAVIES (Ciitheroe): 37.
asked the Home Secretary whether in view of the increase in the number of electors and the insufficiency of public halls capable of holding the electors and the growing resentment to open voting, he will take steps to arrange for parish council elections to be taken by ballot as an alternative to the present method?

Sir J. BAIRD: The question has been considered on several occasions but no satisfactory solution has presented itself which could be carried through without legislation. The representations which have been made to the Government on the subject have been few, and I am afraid I cannot in present circumstances give any promise of dealing with it.

PERFORMING ANIMALS.

Sir WALTER de FRECE: 38.
asked the Home Secretary if it has been decided to hold an inquiry into the whole question of the training and exhibition of performing animals; and, if so, whether, as the methods are similar, this will embrace the use of animals with circuses, theatrical performances, tournaments, street shows, and Punch and Judy displays?

Sir J. BAIRD: The question of the appointment of a Select Committee and of the terms of reference for such Committee is at present under consideration.

CENTRAL CONTROL BOARD (LIQUOR TRAFFIC).

Viscount CURZON: 40.
asked the Under-Secretary of State for the Home Department, as Chairman of the Liquor Control Board, whether the Board has decided not to release any further the was restrictions upon the sale of liquor imposed under the Defence of the Realm. Regulations pending the finding or Report of the Conference recently set up?

Sir J. BAIRD: The position is as follows: In the expectation that it will speedily become apparent whether the Conference will be able to reach a rapid decision on the possibility of dealing with the subject on agreed lines, the Board have decided not to issue any further amending Orders until it appears whether this expectation is to be realised.

Viscount CURZON: In the event of the decisions of the Conference being unduly delayed by reason of the impossibility of coming to an agreement, will the Board consider whether it will not still further relax some of the more unnecessary restrictions?

Sir J. BAIRD: I think that is a repetition of the question on the Paper. If the Conference does not show signs of coming to an agreement rapidly, obviously the Board will continue its work.

Mr. R. RICHARDSON: Is it not a fact that the Board has already decided to give further relaxations?

Mr. SPEAKER: That is covered by the answer already given.

DEER FORESTS AND HEATHER BURNING.

Mr. J. GARDINER: 41.
asked the Secretary for Scotland when the Reports of the Commissions on Deer Forests and Heather Burning will be published; and will he explain the delay that has occurred in the Reports being received?

The LORD ADVOCATE (Mr. Morison): I am informed that the final meeting of the Deer Forests Committee to adjust the terms of the Report will be held in the beginning of July. The collection of the necessary information has taken longer than was anticipated, and the final adjustment of the Report has been
delayed by travelling difficulties. The Report of the Game and Heather Burning Committee is on the point of being submitted to my right hon. Friend. The Report in this case, as my right hon. Friend explained in his reply on the 24th May to my hon. and gallant Friend the Member for Central Aberdeen, has been delayed owing to the indisposition of the Chairman of the Committee.

Oral Answers to Questions — POST OFFICE.

CHANNEL ISLANDS (POSTAL COMMUNICATIONS).

Colonel BURN: 42.
asked the Postmaster-General if he is aware that a letter posted in the ordinary way on Thursday in London is not delivered in the Channel Islands till the following Monday; and will he have the matter investigated?

The ASSISTANT POSTMASTER-GENERAL (Mr. Pike Pease): A letter for Jersey or Guernsey, if posted last Thursday in time for the ordinary London night mail collections on Thursday, should have been delivered on Friday. If posted later in the day, it would not have been delivered till Monday. The London and South-Western Company inform me that on and after the 24th instant there will be a Friday sailing from Southampton, and that on and from the 1st July a weekday service will be resumed from Southampton.

DEFERRED TELEGRAMS.

Lieut.-Commander KENWORTHY: 43.
asked the Postmaster-General if he would be prepared to consider suggestions for the introduction of an additional class of telegrams, known as post or deferred telegrams, such telegrams to be charged at half the rate of ordinary telegrams, to be sent through when the line is clear and to be delivered by postmen on their customary rounds; if his consideration of a scheme of this kind has already been invited; and, if so, what reasons were advanced for the non-adoption of this or some similar scheme?

Mr. PEASE: There is already a class of post or deferred telegrams known as night telegraph letters which can be sent between any two telegraph offices which are open always, for delivery by first post the next morning. The rate is 1d. for every
three words, with a minimum of 1s. The use made of the service is very small, and there is no indication of any demand for its extension. In view of the comparatively short time occupied in the course of post in this country, there seems to be little opening for any deferred service of the kind suggested by the hon. and gallant Member, but I will have the question re-examined.

INSURANCE CARDS (POSTAGE).

Major MACKENZIE WOOD: 44.
asked the Postmaster-General whether he is aware that, in January last, many approved societies issued to their members national health insurance contribution cards, and envelopes bearing ½d. postage stamps for return by post of the stamped cards at the end of this half-year; and whether, in view of the fact that the societies have had no opportunity since the new rates of postage came into force of informing their members that the postage of such cards is now 1d., he will give instructions that the current half-year's stamped cards shall be delivered to approved societies without surcharge if ½d. of postage is prepaid?

Mr. PEASE: I regret that it is impossible to exempt articles sent by particular interests from the regulations and rates of postage applicable to postal packets in general.

Major WOOD: If these packets are posted and acceptance is refused, will they be returned to the Ministry of Health? Will not the Government have more trouble than if they allow what I suggest?

Mr. PEASE: If the hon. Member will confer with me in regard to this matter I will see if there is any way out of the difficulty.

Oral Answers to Questions — IRELAND.

SOUTH OF IRELAND PARLIAMENT.

Lord H. CAVENDISH-BENTINCK: 51.
asked the Prime Minister whether his attention has been drawn to the statement of the Chief Secretary to the Lord Lieutenant of Ireland to the effect that he wished to see a Parliament in the South of Ireland functioning with the widest possible measure of financial control; and whether the Government will make clear what financial concessions it is prepared to make to the Parliaments of Ireland?

Mr. CHAMBERLAIN (Leader of the House): My right hon. Friend the Chief Secretary's remarks in the Debate on the 14th instant had reference to the financial powers and provisions of the Government of Ireland Act and to any further powers that may be necessary if and when the Parliaments of Southern and Northern Ireland make use of the power to unite which the Act conferred upon them.

Lord H. CAVENDISH-BENTINCK: Has my right hon. Friend's attention been drawn to the statement of Lord Donoughmore in another place that the South of Ireland Parliament cannot be expected to function until some large financial concessions are made?

Mr. CHAMBERLAIN: No, Sir.

MILITARY OPERATIONS.

Mr. ACLAND: 90.
asked the Chief Secretary for Ireland whether he will state the terms of Notice B, which is served on persons whose houses or property are to be destroyed by official order in the martial law area?

The ATTORNEY-GENERAL for IRELAND (Mr. Denis Henry): I am informed by the Commander-in-Chief that Notice B gives a brief account of any murder or outrage for which the Military Governor has decided to exact punishment and his reasons for the selection of any particular property for destruction as a consequence. It further states the time allowed to the owner or occupant from the hour of receipt of the notice for the removal of valuables, foodstuffs or forage.

Captain W. BENN: Does Notice B describe the military necessities under which the house is being destroyed?

Mr. HENRY: Yes, it is the reason for the selection of that property.

Captain BENN: Does it give the reasons of military necessity?

Mr. HENRY: I am informed by the Commander-in-Chief that the notice gives the reasons for the selection of any particular property for destruction.

Lieut.-Commander KENWORTHY: Is this a printed form, and if so, how can it be applied to each particular case, as for example, a man who is in hospital at the time of the outrage whose house was blown up?

Mr. HENRY: I do not think it is a printed form. I believe it is written in each case.

Mr. ACLAND: 92.
asked the Chief Secretary by whose orders the proclamation was issued at Military Headquarters, Cork, on 29th April, to the effect that, owing to the burning of the houses of two loyalist farmers in the Crossbarry neighbourhood, three farmhouses of prominent and active Sinn Feiners were burnt as an official reprisal, and that it is intended to carry out official reprisals in that proportion, or, if that does not have the desired effect, in greater proportion; and whether this proclamation is still in force?

Mr. HENRY: The Commander-in-Chief informs me that a public notice to this effect was issued on the authority of the military governor. Every official action taken against property is governed by the recent order of the Commander-in-Chief referred to in the reply given by my right hon. Friend the Chief Secretary to the hon. and gallant Member for Bury St. Edmunds on 13th June.

Mr. MOSLEY: 94.
asked the Chief Secretary how many houses have been burned in Ireland since the initiation of official reprisals on the ground that their owners have afforded moral support to Sinn Fein; whether he will describe what constitutes moral support; and whether voting for Sinn Fein candidates at the recent election is considered to be moral support?

Mr. HENRY: The number of houses destroyed by official Orders in the martial law area was given in reply to a question by the hon. Member for Rothwell as recently as last Wednesday. My right hon. Friend the Chief Secretary has already dealt very fully with the reasons for which these punishments have been inflicted, and I cannot undertake to analyse those reasons in the way the hon. Member desires. As regards the last part of the question, however, I may point out that there was no voting at the recent election within the area in which these punishments have taken place.

Mr. MOSLEY: In reference to the new ground that was given on 15th June, that these houses were burned because their owners had afforded moral support to Sinn Fein, will the right hon. Gentleman describe what he means by "moral support"?

Mr. HENRY: I find it difficult to answer a question of that kind, because there are a great many people who give moral support to Sinn Fein who would never admit it.

Captain BENN: Does the right hon. Gentleman say that the giving of moral support to Sinn Fein is sufficient excuse for the destruction of the property of people who give it?

Mr. HENRY: I can only deal with the particular question put to me. If any question refers to a specific case I will endeavour to answer it.

Mr. MOSLEY: Is the right hon. Gentleman aware that the chief moral support derived by Sinn Fein either in Ireland or abroad is due to the incompetence and brutality of the Government?

WOMEN SEARCHERS.

Mr. ACLAND: 91.
asked the Chief Secretary how many women are at present employed in Ireland as searchers of women prisoners; from what sources such women are recruited; and whether they are considered to form part of the police forces?

Mr. HENRY: I do not feel called upon to give the number of women employed on searching duties or the source from which they are recruited. They carry out their duties under the directions of the police and military authorities, and are paid from police funds, but they do not form part of the police force.

ATTACKS ON CROWN FORCES.

Mr. MOSLEY: 93.
asked the Chief Secretary whether he will state the number of attacks made on Crown forces in Ireland during the week ending 11th June, and the number of casualties resulting to the Forces of the Crown and civilians respectively?

Mr. HENRY: There were 55 attacks on Crown Forces during the week ending 11th June. The casualties to Crown Forces were: police, 5 killed, 35 wounded; military, 2 killed, 1 wounded. So far as is known, 7 civilians, including 6 rebels, were killed and not fewer than 7 wounded.

Lieut.-Commander KENWORTHY: In view of that appalling account, do the Government still consider that their methods are succeeding in Ireland?

Mr. HENRY: Yes, Sir.

NORTH OF IRELAND PARLIAMENT.

Major HAMILTON: (by Private Notice) asked the Prime Minister whether His Majesty's Gracious Speech on the occasion of the opening of the Northern Parliament in Ireland will be based on the advice of His Majesty's Ministers in this country, or His Majesty's Ministers in Northern Ireland?

Mr. CHAMBERLAIN: The speech which His Majesty will deliver will not announce the programme of legislation of the Government of Northern Ireland, upon which the local Ministers would naturally advise, but will be an act of State by the Head of the Empire at the opening of the new Parliament. It will therefore be made on the advice of the Ministers responsible to the Parliament of the United Kingdom.

Major HAMILTON: Will there be anything in the nature of a King's Speech setting forth the policy of His Majesty's Ministers in Northern Ireland after His Majesty has graciously opened that Parliament?

Mr. CHAMBERLAIN: That I cannot say. In any case it will not be the speech which will be delivered by His Majesty at the opening of the Parliament. Whether the Viceroy will subsequently on the advice of his Ministry deliver a speech setting forth the programme of the Ministry, or whether that programme will be set forth in a Ministerial declaration by the Prime Minister of Northern Ireland, is not for us to state, and I cannot say.

Lieut.-Colonel CROFT: Is it not a fact that in any Assembly comparable to that of the Ulster Parliament in other parts of the Empire there is no precedent to show that there has ever been a King's Speech of the character suggested?

Mr. CHAMBERLAIN: I am not clear as to the meaning of my hon. and gallant Friend, but every Session of each Parliament of the Empire is, I think, habitually opened by the representative of the King in the country concerned reading a speech prepared on the advice of the local Ministers, and containing their programme on the same lines as the programme of the Government in this country is put into the King's Speech here. Of course, there is no exact precedent for the presence of the King at the opening of any Parliament, except this
Parliament, but there is an analogous case when his Majesty, as the Duke of York, shortly after the accession of King Edward, went to Australia and opened the first Commonwealth Parliament of Australia. The course which we are taking on this occasion is the course which was taken then, and I think that it is clearly the proper constitutional course.

Mr. RONALD McNEILL: Am I to understand from that that any speech which His Majesty may graciously make at the opening of the North of Ireland Parliament to-morrow will be one for which Ministers in the North of Ireland will have no responsibility whatever?

Mr. CHAMBERLAIN: Certainly. The speech which His Majesty will make at the opening of the North of Ireland Parliament will be a speech for which Ministers here take full responsibility. It has been prepared on their advice.

MURDER OF OFFICERS.

Earl WINTERTON: (by Private Notice) asked the Secretary of State for War whether, in view of the fact that five British officers have been murdered in Ireland while off duty during the last few days, he proposes to take any steps to insure that officers in the disturbed parts of Ireland shall not leave barracks unless attended by an armed escort?

Sir L. WORTHINGTON-EVANS: I have full confidence in the Commander-in-Chief in Ireland and I am sure that the suggestion of my Noble Friend will not have escaped his attention. I am convinced that he will do everything in his power to insure the safety of the officers and men under his command.

Earl WINTERTON: In view of the appalling effect on the moral of the troops in Ireland caused by these incidents, apart from their horror, and the fact that they have now been going on for many weeks without any action on his part, will the right hon. Gentleman make an announcement to the House as to what steps he proposes to take to protect those for whom he is responsible?

Sir L. WORTHINGTON-EVANS: I do not feel that it is desirable to interfere with the discretion of the Commander-in-Chief in Ireland.

Lieut.-Colonel GUINNESS: Is the right hon. Gentleman aware that this is
practically the same answer that was given after 19 officers were killed one Sunday morning in Dublin? Is it not time now to give orders that officers are to go out only fully armed and in parties sufficient in number to defend themselves?

Sir L. WORTHINGTON-EVANS: If the Commander-in-Chief in Ireland thought that that was a possible and desirable course, I have not the slightest doubt that he would order it.

Colonel ASHLEY: Is not the right hon. Gentleman responsible, not the Commander-in-Chief in Ireland?

Sir L. WORTHINGTON-EVANS: And I am fulfilling my responsibilities through the Commander-in-Chief.

Earl WINTERTON: Should questions on this subject be put in future to the Chief Secretary to the Lord Lieutenant of Ireland, who is responsible for the troops in Ireland and their well-being?

Sir L. WORTHINGTON-EVANS: My Noble Friend has put a question to me, and I have answered his question.

DARDANELLES.

Mr. A. HERBERT: 52.
asked the Prime Minister whether he has repeatedly stated that the Dardanelles should be neutralised; and if, in view of these solemn statements, he will explain why Greek naval forces have been allowed to pass through these neutral waters and bombard open Turkish towns?

Mr. CHAMBERLAIN: As regards the status of the Dardanelles, the Prime Minister gave my hon. Friend a full reply on 18th April. The provisions of the Treaty of Sevres for guaranteeing the freedom of the Straits do not contemplate-the exclusion of the warships of any Power from navigating those waters. There could accordingly be no question, even if the Treaty were already operating, of preventing the passage of Greek men-of-war.

NATIONAL EXPENDITURE AND REVENUE.

Captain W. BENN: 53.
asked the Chancellor of the Exchequer whether it is proposed to introduce revised Esti-
mates before the Committee of Supply is closed, as a result of economies made pursuant to the recent Treasury circular?

Mr. YOUNG: In view of the short time available before Committee of Supply is closed, I do not think the course suggested by the hon. and gallant Member would be a suitable, or, indeed, possible, one. It will be remembered that answers to the circular are not expected to be received till towards the end of July.

Captain BENN: Does that reply mean that no substantial economies are hoped for?

Mr. YOUNG: No, Sir.

Sir DONALD MACLEAN: 61.
asked the Chancellor of the Exchequer whether it is his intention, before the end of the Session, to present to the House a fresh estimate of the expenditure and revenue of the current year?

Mr. YOUNG: As I stated on the 2nd instant, my right hon. Friend the Chancellor of the Exchequer sees no reason to modify the Budget Estimates of revenue, and he is not yet in a position to add, as regards expenditure, to what was said in the Budget statement.

Sir D. MACLEAN: May I ask, without any disrespect to my right hon. Friend the Chancellor of the Exchequer, why it that he is not here, seeing that it is his day? If there is some unavoidable reason, well and good, but I should like to know.

Mr. CHAMBERLAIN: I hope I may be permitted to answer that question. I am sure that the House will extend to my right hon. Friend the consideration which it has been good enough uniformly to show to me. My right hon. Friend was busily engaged all day yesterday, and will be to-day, in conducting the Finance Bill through Committee, and, as I had occasion to speak to him a few moments ago, I have reason to know that he is at work with a view to the discussion which will take place this afternoon.

Mr. ACLAND: The question was whether the Chancellor of the Exchequer will make any fresh Estimates before the end of the Session. Was that quite accu-
rately answered by the references to the Chancellor of the Exchequer's present opinion?

Lieut.-Commander KENWORTHY: In view of the fact that the industrial situation will result in a great loss to the revenue, are the Government not considering a reduction of Estimates before the end of the year?

Sir G. COLLINS: Is the hon. Gentleman aware that the balance of expenditure over revenue for the first two months of this year is £16,000,000, and that in the corresponding period of last year there was a surplus of £37,000,000?

Mr. SPEAKER: The hon. Member is giving information, and not asking for it.

Captain BENN: Could the hon. Gentleman give us an idea of the aggregate increase in expenditure over the Budget Estimate?

ADULTERATED MILK (PROSECUTIONS).

Mr. HURD: 70.
asked the Minister of Agriculture whether, in view of recent proceedings, he will consult the Minister of Health as to the issue of a circular letter to local authorities informing them that the basis of prosecutions for supplying milk deficient in fat should be not one or two tests made in exceptional circumstances, but a series of tests, so that while detecting adulteration the farmer or dairyman may not be penalised for faults for which neither can be held responsible?

The MINISTER of AGRICULTURE (Sir Arthur Boscawen): I am examining into such recent cases as my hon. Friend has put before me of the prosecution of dairymen in respect of the sale of milk of poor quality. As I stated in my reply on the 16th instant, I shall be prepared, if the body of evidence warrants it, to consult with my right hon. Friend the Minister of Health with a view to the issue of a circular letter to local authorities.

FERTILISERS.

Major W. MURRAY: 71.
asked the Minister of Agriculture what agricultural manures or fertilisers are now con-
trolled in regard to the prices at which they may be sold in this country; and if he will now remove all such controls still existing?

Sir A. BOSCAWEN: The prices at which agricultural manures or fertilisers may be sold in this country are not now subject to control by the Ministry. The second part of the hon. and gallant Member's question does not, therefore, arise.

Oral Answers to Questions — EX-SERVICE MEN.

LAND SETTLEMENT.

Mr. HURD: 72.
asked the Minister of Agriculture if care is taken that in all cases of land allotted to ex-service men with Government assistance the rents are not increased above those charged to the former tenants; and, if cases of such increases are brought to his notice, will he take action?

Sir A. BOSCAWEN: The rents of all holdings let by councils to ex-service men under the Government Land Settlement Scheme are submitted by the council to the Ministry's district commissioner for his approval. The rents must in every case be fair rents, having regard to the present value of the land in small holdings. I do not consider, however, that the rents which were payable in respect of the land when let as large farms would be a proper basis for fixing the rents of the small holdings, especially when cottages and farm buildings have been added. In reply to the last part of the question, I am always prepared to consider any representations made by ex-service men as to the rents charged for their holdings.

INSTITUTIONAL TRAINING.

Mr. PENNEFATHER: (by Private Notice) asked the Minister of Labour if he has received a copy of the resolutions passed at a meeting of Local Training Committee No. 23 on Friday last; and if he will give telegraphic instructions that the men who are due to leave the training factories to-night and in the near future are to be retained and continue their training until such time as improvers' vacancies can be found?

The PARLIAMENTARY SECRETARY to the MINISTRY of LABOUR (Sir Montague Barlow): I have seen the reso-
lutions referred to. The men whose institutional training is now being terminated have received not less than six months' extension over and above the prescribed period. The suggestion is that they should be retained in training centres for an indefinite period until improverships can be found for them in private workshops. I regret that, in view of large numbers still awaiting training, I cannot adopt this suggestion. I recognise the hardship entailed on these men by the present industrial depression. Every effort is being and will continue to be made by the Ministry of Labour to find improver vacancies for them.

Sir J. REMNANT: Are men who have finished their training to be turned out on the streets, without any further endeavour being made to find them employment, and without even the tools with which they have been trained?

AGRICULTURAL COMMITTEES.

Mr. HURD: 73.
asked the Minister of Agriculture whether he has called upon the various agricultural committees throughout the country to curtail their estimates for the current year by 20 per cent.; whether at the same time these committees are in receipt of a communication from his Ministry in reference to a new scheme involving the appointment of various inspectors in each area; and whether he has observed the comment of experienced members of these committees that the work of these inspectors now greatly overlaps, and in the south-western districts they already constitute a formidable list?

Sir A. BOSCAWEN: The reply is in the negative. It was intended to place a limit on the expenditure of each agricultural committee in respect of services chargeable entirely to the Ministry's Vote, mainly in connection with the administration of Part I. of the Agriculture Act, 1920. As a result, however, of the decision to repeal that Measure, the greater part of such expenditure will entirely disappear. No new officers are being appointed by the county agricultural committees except in a few isolated cases where, owing to the inadequacy or even entire absence of local staff, temporary appointments not exceeding three months are necessary in connection with the
checking of corn claims. With reference to the second part of the question, the scheme referred to does not involve the appointmnt of any additional inspectors. The existing staff has been regrouped in divisions with the object of avoiding overlapping and securing more efficient and economical administration.

Mr. HURD: How does the right hon. Gentleman explain the impression which is so prevalent in the south-western counties that what some of these authorities call a horrifying list of new inspectors is being sent out?

Sir A. BOSCAWEN: It is very difficult to explain its prevalence generally.

AIRSHIPS (DISPOSAL).

Lieut.-Commander KENWORTHY: 74.
asked the Secretary of State for Air whether the date for the disposal of the rigid airships has been postponed; what additional expenditure this will entail; and what is the reason for this alteration of policy?

The SECRETARY of STATE for AIR (Captain Guest): No, Sir, the date 1st August still stands.

Lieut.-Commander KENWORTHY: Was it not decided last year that these airships should be disposed of before this? When was the decision taken to wait till August?

Mr. SPEAKER: That does not arise here.

Sir W. DAVISON: Will the right hon. Gentleman say when the surplus gasbags in the House of Commons will be disposed of?

FOREIGN SUGAR.

Mr. G. MURRAY: 76.
asked the President of the Board of Trade whether, in view of the great importance to our Colonial sugar industry of the prevention of the dumping of foreign sugar, the Government will give an assurance that upon the passing of the Safeguarding of Industries Bill its provisions will be applied so as to prevent foreign sugar from being sold in this country below the cost of production?

Sir P. LLOYD-GREAME (Secretary, Overseas Trade Department): I would remind my hon. Friend that the provisions which he has in mind do not apply to articles of food.

Mr. MURRAY: Is the hon. Gentleman aware of the state of uncertainty existing in the sugar trade in the Colonies, and are the Government proposing to do anything to let those who are developing the industry know that they will not be competed with by dumped sugar, as was the case before the War?

Sir P. LLOYD-GREAME: The general problem with which my hon. Friend asks me to deal hardly arises out of the question. As regards the specific point, no one can be in any doubt, as it is stated in explicit terms in the Bill itself.

INCOME TAX.

Mr. JAMES BROWN: 56.
asked the Chancellor of the Exchequer whether he is aware that John Davidson, schoolmaster at Ochiltree, Ayrshire, is assessed for Income Tax on his own and his wife's salaries; that Mrs. Davidson is teaching at Skares public school and, from the want of travelling facilities, is forced to hire a motor taxi-cab; that this costs upwards of £40 per annum; that Mr. Davidson has repeatedly applied for an abatement of £40, and that, in spite of the expressed sympathy of the surveyor of taxes and the Income Tax Commissioners, the abatement asked for has been refused; and whether he will take steps to ensure that an abatement shall be made in all such cases?

Mr. YOUNG: My right hon. Friend the Chancellor of the Exchequer has caused inquiry to be made into the case referred to, and he will inform the hon. Member of the result of it.

Colonel NEWMAN: 62.
asked the Chancellor of the Exchequer whether he will ascertain if there has been a decision by the Special Commissioners of Income Tax that deductions under Schedule E in respect of expenses incurred by a director in travelling to and from the place of business of his company or in attending a board meeting, where the board meeting is not held at the place of business, are not admissible; and, if so, on what grounds can Members of this
House obtain remission for Income Tax purposes of the costs incurred in visiting their constituencies?

Mr. YOUNG: I have no information as to the particular case to which my hon. and gallant Friend refers, but I may remind him that in 1890, in the case of Revell v. Directors of Elworthy Brothers and Company, Limited (3, Tax Cases, 12), the High Court decided that the expenses of directors in travelling from their residences to the place of meeting of the company were not an allowable deduction for Income Tax purposes. Such expenses are clearly distinguishable from the expenses of a Member of Parliament incurred in the performance of the duties of his office, namely, the expenses of travelling between Westminster and his constituency, the two places at which his duties as Member are performed.

BRITISH CELLULOSE COMPANY.

Lord H. CAVENDISH-BENTINCK: 59.
asked the Chancellor of the Exchequer whether he is aware that the British Cellulose Company, in the prospectus which they issued inviting the support of the public, stated that their plant was capable of turning out a large quantity of artificial silk, although at the time of issue of the prospectus the promoters of the company had not discovered the process of making an artificial silk which was capable of taking a dye; and was the Government responsible in any for the issue of this prospectus?

Mr. YOUNG: The Noble Lord has been misinformed in one particular. My right hon. Friend the Chancellor of the Exchequer is advised that the silk produced by the company has always been capable of taking dyes. With regard to the last part of the question, the responsibility for the advertisement of the issue rests, not with the Government but with the issuing house, but it is the case that the prospectus was submitted to the Government in order to approve the terms in which the prospectus referred to the Government's acceptance of preference shares.

Mr. BRIGGS: Is the hon. Gentleman aware that this company has not, even yet, produced an article which is of the slightest use to traders?

Lord H. CAVENDISH-BENTINCK: Is the hon. Gentleman aware that the British Cellulose Company has not yet been able, so far as I am aware, to sell any silk that is capable of taking dye?

Mr. YOUNG: My own information is not in accord with the suggestions contained in the supplementary questions, but, in order that I may give a careful answer, I should like notice of questions of that kind.

Oral Answers to Questions — PEACE TREATIES.

GERMAN REPARATION.

Mr. WISE: 60.
asked the Chancellor of the Exchequer if Germany has made the payment of 1,000,000,000 marks gold due at the end of May of which 200,000,000 marks had to be in cash; if this amount has been received; what has happened to the cash and if the balance represented German treasury bills; and does this amount go against the quarterly payments due on 15th July and 15th October?

Mr. YOUNG: The answer to the first, second and last parts of the question is in the affirmative. The payment made by Germany is partly in cash and partly in German Treasury Bills. I have not exact particulars of the amount paid in cash. The cash is in the hands of the Reparation Commission, which is holding it in accordance with the terms of the arrangement accepted by the German Government for application to the service of the German Reparation Bonds issuable under that agreement.

Mr. GALBRAITH: 83.
asked the Financial Secretary to the Treasury what is the amount received in respect of the German Reparation (Recovery) Act?

Mr. YOUNG: The amount received in respect of the German Reparation (Recovery) Act to the 18th instant inclusive was £62,000.

INDUSTRIAL DISPUTES (GOVERNMENT PUBLICITY).

Captain W. BENN: 81.
asked the Financial Secretary to the Treasury what is the total amount that has been spent on posters and circulars printed by Government Departments since the General Election in reference to the present indus-
trial difficulties or other such questions; whether they bear an imprint showing their source of origin; and on what Votes the money has been granted?

Mr. YOUNG: The time and labour which would be involved in preparing a statement of the cost of posters and circulars separately would be considerable, and I hope the hon. and gallant Member will accept the following general answer:
The total amount spent on Government publicity, including posters and circulars, in connection with industrial disputes since the last General Election is £111,460, namely:



£


(a) Railway industry dispute, autumn, 1919
43,710


(b) Coal industry dispute, autumn, 1920
11,750


(c) Coal industry dispute, 1921 (approximately to date)
56,000



£111,460


With regard to the second part of the question, it is the practice for the imprint to show the source of origin. The cost of publicity has been borne on the Emergency Services Votes accounted for by the Home Office.

Captain BENN: Do the figures the hon. Gentleman has given include the cost of placarding the portraits of Members of the Government, and is he aware that in the coal industry dispute there is no imprint whatever on the posters?

Mr. YOUNG: I do not know to which part of the publicity costs the hon. and gallant Gentleman refers in the first part of his supplementary question. In the answer I have given the figures are inclusive of all parts of the publicity costs. If there are any particular cases as regards the imprint, as to which my information is not quite the same as his, I shall be interested to have my attention drawn to them.

Captain BENN: If the hon. Gentleman looks at any of these posters and sees that there is no imprint, will he see that the poster is made in accordance with the answer he has given?

CUSTOMS AND EXCISE (SUPERANNUATION).

Mr. R. RICHARDSON: 82.
asked the Financial Secretary to the Treasury if he can state the number of officials at present serving in the Customs and Excise who reached the age of 62 and upwards on the 1st June 1921, and the number of surveyor and officer grades, respectively, that have attained the age of 61 on the same date: and when it is proposed to revert to pre-War conditions of superannuation in the Customs and Excise Departments?

Mr. YOUNG: The number of officials at present serving in the Customs and Excise Department as a whole, who reached the age of 62 and upwards on the 1st June, 1921, is 264, of whom 165 are retiring shortly. The numbers of surveyors and officers who reached the age of 61 and upwards on the same date are 115 and 230 respectively, of whom 91 and 95 respectively are retiring shortly. The age limits for retirement were necessarily suspended during the War, and steps are being taken to return to them, but this can only be done gradually and it is not possible at present to say when the pre-War age limits will be reached in all ranks.

MINISTER WITHOUT PORTFOLIO.

Major C. LOWTHER: 86 and 87.
asked the Minister without Portfolio (1) what are the duties upon which he is now engaged;
(2) whether he has made any proposals to the Treasury with a view to securing a large reduction in the Estimates for the financial year 1922–23, in accordance with the recommendations of the Treasury Circular dated 13th May, 1921?

Mr. CHAMBERLAIN: This is a question which will be dealt with in the Debate fixed to take place on Thursday.

Major LOWTHER: Does the right hon. Gentleman bar all questions because the Government has given a day for discussion? Surely we are entitled to ask a question.

Mr. CHAMBERLAIN: I think I can promise my hon. and gallant Friend that he will have the discussion he desires on Thursday. As we have fixed that day I
do not think any useful purpose will be served by attempting to make Ministers state in detail in answer to a series of questions that which they can state fully in Debate.

Major LOWTHER: I beg to give notice that I will, at the end of Questions, ask leave to move the Adjournment of the House.

Earl WINTERTON: Is it competent to put any question to this Minister at all under the arrangements made by the Government?

Mr. CHAMBERLAIN: Yes, I think it is obvious because there are two questions on the Paper to-day. Whether they should be answered by the Minister himself or by another Minister is a matter which, in accordance with the usual practice, is decided by Ministers themselves.

Earl WINTERTON: May I ask whether, also in accordance with the usual practice of the House, the right hon. Gentleman can arrange that in future questions put to the Minister, which concern his Department, shall be answered by him?

Mr. CHAMBERLAIN: No. If my Noble Friend will look at the series of questions addressed to the Prime Minister and myself he will observe that hen. Members do not choose to follow that rule themselves, though they may occasionally think it desirable to impose it upon Ministers.

SPORTS' GATHERINGS (POLICE DUTIES).

Mr. LYLE: 30.
asked the Home Secretary whether, on the occasions of any great gatherings for the purposes of witnessing sport, any duty rests on the police to ensure that proper provision is made by the promoters to secure public convenience both in entering and leaving; and, if not, whether he will consider what steps can be, or ought to be, taken in that direction?

Sir J. BAIRD: It is part of the duty of the police to make provision, when necessary, for maintaining order among persons entering or leaving sports' grounds, but not to supervise the arrangements for admission; that is a matter which must, I think, be left to the promoters.

PRISON REFORMS.

Mr. MYERS: 32.
asked the Home Secretary whether there is any suggestion to abolish various small reforms introduced into the prison system during the last few years; and whether a Committee is at present considering this matter?

Sir J. BAIRD: There is no such suggestion, and no Committee is at present considering the matter. There is a Committee now sitting on Prison Estimates, in accordance with the Treasury Circular of the 13th May, but there is no question of abolishing "reforms."

JUVENILE OFFENDERS.

Mr. MYERS: 33.
asked the Home Secretary whether girls as young as 16 are sent to Holloway Prison; whether boys and girls sent for Borstal treatment are taken to Holloway Prison for any period; and, if so, whether he will give instructions for this practice to cease, in view of the fact that the object of the Borstal system is to keep juvenile criminals from the influence of the ordinary penal system?

Sir J. BAIRD: There have been no commitments of girls under 16 to Holloway Prison, and the number under 17 has been very small. No males are committed to Holloway in any circumstances. Girls committed to Borstal Institutions only go to Holloway en route to the Borstal Institution, and during their short detention there they are specially treated and strictly separated from adult prisoners.

THEATRES (SALE OF CHOCOLATES).

Captain O'GRADY: 36.
asked the Home Secretary whether he can state when the provisions of the Shop Hours Act will come up for review; and whether, in view of the fact that the public regard the prohibition of the sale of chocolates in theatres after 8 p.m. as irritating and vexatious, he will see that this question will be reopened and representations received as to the inconvenience caused to the public by this Regulation?

Sir J. BAIRD: I am afraid there will be no opportunity for any amending Bill this Session. The most that will be possible will be legislation to continue the existing arrangements for a further period.

FACTORIES AND WORKSHOPS (BAKEHOUSES) BILL.

Lieut.- Colonel PINKHAM: 89.
asked the Home Secretary if it is proposed to reintroduce the Factories and Workshops (Bakehouses) Bill this Session?

Sir J. BAIRD: I am afraid it will be impossible to proceed with this Bill this Session.

Sir J. D. REES: Is the hon. Gentleman aware that a great many bakers do not want this Bill?

NAVAL LAW (DESTRUCTION OF SHIPPING).

Viscount CURZON: 47.
asked the Prime Minister whether a difference exists between English and German naval law with regard to the right to destroy shipping at sea and in the use of hospital ships; and whether His Majesty's Government are prepared to accept German naval law in respect to any case arising out of the late War?

The ATTORNEY- GENERAL (Sir Gordon Hewart): I am asked to reply to this question. There are, as I understand, various differences between English and German naval law with regard to the destruction at sea of neutral shipping, the German regulations authorising the destruction of such shipping in cases where destruction would not be lawful according to the English regulations or the English view of international law on the subject. There does not appear to be any substantial difference between the English and German law as to the right to destroy enemy shipping or as to the use of hospital ships, but the German rule that superior orders constitute a valid defence in all cases except where the person doing the act knows that it is unlawful and that his superior also knew that it was unlawful is not recognised by English law. The answer to the second part of the question is in the negative.

Sir J. BUTCHER: Can the right hon. Gentleman say whether by German law the giving of orders to destroy hospital ships is admitted to be illegal?

Sir G. HEWART: I do not think so; but before giving a final answer I should like to consider it. On the whole I do not think so.

ALBANIA.

Mr. A. HERBERT: (by Private Notice) asked the Prime Minister (1) whether proposals have been made and are now being considered to transfer the question of the delimitation of the Albanian frontier from the League of Nations to the Council of Ambassadors;
(2) whether the Albanian Government as a member of the League of Nations has requested that the question of frontiers between itself and its adjacent fellow-members of the League should be undertaken by the League of Nations?

Mr. CHAMBERLAIN: I am not aware that the question of fixing the frontiers of Albania has ever come before the League of Nations. It has been referred for settlement to the Conference of Ambassadors at Paris by agreement between the British, French and Italian Governments. Meanwhile, the Albanian Delegation in Paris has appealed to the Council of the League of Nations to compose certain local differences that have arisen between Albania and her Serb and Greek neighbours.

Mr. HERBERT: Is my right hon. Friend aware that some time ago the Council of Ambassadors of the Supreme Council partitioned the country of Albania, and that it was exactly for the purpose of preventing these things that the League of Nations was founded; and may I ask if Albania's appeal for an impartial tribunal will be considered, and her country not turned over to a partial tribunal?

Mr. CHAMBERLAIN: I would ask my hon. Friend to put down a question of this international importance.

Lord R. CECIL: Can the right hon. Gentleman tell the House the exact nature of the appeal which, according to the papers, the Albanian Government has made to the Council of the League?

Mr. CHAMBERLAIN: I cannot trust my memory to state with sufficient accuracy what has passed in matters of this international character, unless I have notice of the question.

MINISTER WITHOUT PORTFOLIO.

Major C. LOWTHER: I beg to ask leave to move the Adjournment of the House for the purpose of discussing a
definite matter of urgent public importance, namely, "the failure of the Government to give information to the House as to the duties of a Minister who is now receiving a salary which is to be provided out of public moneys."

Mr. SPEAKER: This Motion fails on two grounds. The first is that it can hardly be urgent as it has been the subject of criticism for some time. But the major ground is that two days hence an opportunity will be afforded on which the whole matter can be debated. I cannot allow Standing Order No. 10 to be made use of when there is a reasonably early opportunity for debating the subject.

Major LOWTHER: I quite accept your ruling, but we are here a very small minority in the House, and we look to you for protection and have always received great protection. I addressed a question to a Minister to-day, and although naturally I could not expect to get an answer that was satisfactory, he was perhaps not extending the usual courtesy in refusing to give any answer at all.

Mr. SPEAKER: I have dealt with the question.

MURDER OF OFFICERS (IRELAND).

Earl WINTERTON: I beg to ask leave to move the Adjournment of the House for the purpose of discussing a definite matter of urgent public importance, namely, "the continued failure of the Secretary of State for War to take any effective steps to secure the safety of officers in His Majesty's Army in Ireland when off duty."
In submitting the question to you, Sir, I may mention two facts. One is that 19 officers were murdered in Dublin last November. The other is that a number of officers have been murdered since then, all off duty, and five have been murdered within the last five days.

Mr. SPEAKER: The hon. and gallant Member must slightly alter the form of his Motion. I understand that he bases it on events which have just come to his knowledge.

Earl WINTERTON: Within the last 48 hours.

Mr. SPEAKER: The hon. Member for the Horsham Division asks leave to move
the Adjournment of the House, in order to call attention to a definite matter of urgent public importance, namely, "the failure of His Majesty's Government to take any effective steps to secure the safety of officers of His Majesty's Army in Ireland when off duty, as shown by the murder of many such officers within the last five days."

The pleasure of the House having been signified, the Motion stood over, under Standing Order No. 10, until a quarter past Eight o'clock this evening.

MINISTRY OF MUNITIONS INQUIRY (PERSONAL EXPLANATION).

4.0 P.M.

Captain LOSEBY: On a point of personal explanation. A series of questions were asked in this House on Thursday last, which, in the opinion of some of my hon. Friends, contain a clear suggestion that I have personally acted improperly in the matter which culminated in the Ministry of Munitions Inquiry. As the circumstances are peculiar and I am not in a position to reply to any such suggestion either on the Floor of the House or in the Press, you have been kind enough to allow me in a few sentences to explain the position. I do so, not because I care anything about my own position, but rather out of fairness to certain witnesses who gave evidence before that inquiry, and because I hope that the matter may now be finally closed. This is the position. At the request of the House, a certain tribunal was set up. That tribunal was exactly in the form for which I asked. My right hon. Friend the Leader of the House was kind enough to meet me in this matter as he did in all other matters in relation to that inquiry. The terms of reference also were amended to contain the exact words for which I asked. The tribunal met, and before that tribunal I presented with all the vigour of which I was capable the available evidence. The tribunal was presided over by a judge of the High Court, and it has now given its findings. It would be as unfair as it would be improper for me to endeavour in any kind of way to re-open the matter. Of course, I loyally accept the findings of that tribunal. It is impossible for me to reply in any kind of way so far as my own bona fides in the matter are concerned without re-opening
it, and it is in order that I might say that, and in order that I may not appear to be acquiescing in the suggestion, that you have been kind enough to allow me to say these few sentences. I may have been quite wrong, but I thought that I was right.

SECRETARIES TO THE TREASURY.

Mr. HAYWARD: I beg to move, "That leave be given to bring in a Bill to limit the number of Parliamentary Secretaries to the Treasury."
This is a very short Bill, consisting of one Clause only, and it provides that the number of Parliamentary Secretaries to the Treasury shall not exceed two, thus reverting to the practice before the formation of the first War Coalition Government, when the number was increased to three by adding an additional Patronage Secretary, or Chief Whip. The history of this office is somewhat obscure. I believe that the late Lord Burleigh was the first to make such an appointment, and he appointed only one. Subsequently the number was increased to two. One was attached to the Chancellor of the Exchequer. His duties were purely financial and official, and he was called the Financial Secretary to the Treasury. The other was attached to the First Lord, who was generally the Prime Minister, and he was, from the nature and character of the more important part of his duties, called the Patronage Secretary. That office, as we know it, took shape about the beginning of the eighteenth century. There is no doubt that at one time the duties of the Patronage Secretary were very onerous and responsible. According to Redlich and Ilbert's work on "Procedure of the House of Commons," we find that:
He had in his hands the disposal of the whole of the Government patronage, the distribution of places, livings, and open and secret favours. In the days of rotten boroughs and secret service money, often amounting to millions of pounds, the holder of this office—one of whose duties was to look after the purchase of constituencies for the maintenance of the majority—obtained an enormous influence over Members of Parliament.
This part of the duty of the Patronage Secretary all disappeared after the Reforms of 1832, and from the same authority we learn that
the Patronage Secretary now has to ply his calling with very different tools from those used by his namesake a hundred years ago.
In spite of the disappearance of the reservoir of public funds from which we could draw, there is no question that the Patronage Secretary still obtains and maintains enormous influence over Members of Parliament. That great authority, Redlich, lets us into the secret how this is done, for he says:
The authority of the Whip is of a purely moral nature.
Hon. Members on all sides of the House know that quite well from their own knowledge and experience. This authority lets us further into the secret and gives us some indication of the nature of the moral authority which is exercised, for, speaking of the Chief Whip, he says:
He must be acquainted with each Member, know his weak and strong points, be able to talk him round, to coax him by smiles, by exhortations, by friendly remonstrances, and by promises or other devices, such as invitations to the entertainments of the dukes and marquises of the party, which he gets for Members and their wives.

Sir F. BANBURY: May I ask what the hon. Gentleman is quoting?

Mr. HAYWARD: Yes, certainly; Redlich and Ilbert, the late Clerk to this House, on "Procedure of the House of Commons," which the right hon. Gentleman will find in the Library. It is clear from this—and it is very relevant to this matter—that the predominant duties of the Patronage Secretary are purely political, and part political at that. I am quite willing to concede that there are sufficient official duties, as distinct from Party duties, attached to the office to justify one Patronage Secretary, because, after all, there is his duties in this House in arranging the business, and there is also the disposal of such patronage as is still left at the disposal of the First Lord. That being so, I do not think that it can possibly be pretended that there are sufficient official duties to justify the appointment of two Patronage Secretaries. Everybody knows that the number was increased when the First War Coalition Government was formed. There was at least this justification, that at that time the Chief Whips were performing no Party political duties; in fact, the Party machines, of which they were the heads, were diverted
entirely to public and War services, and the two right hon. Gentlemen who then acted as the Chief Whips were engaged very largely in public War work. Now we are back in normal Parliamentary circumstances, and, in view of the fact that there are not sufficient official duties to engage the attention of two Chief Whips, and in view of the importance of economy even in so small a matter, I do think that the time has come to revert to the pre-War practice.

Question put, and agreed to.

Bill ordered to be brought in by Mr. Hayward, Captain Wedgwood Benn, Dr. D. Murray, and Major Mackenzie Wood.

SECRETARIES TO THE TREASURY BILL,

"to limit the number of Parliamentary Secretaries to the Treasury," presented accordingly, and read the First time; to be read a Second time To-morrow, and to be printed. [Bill 146.]

PRESTON'S DIVORCE BILL [Lords],

Ordered, That a Message be sent to the Lords to request that their Lordships will be pleased to communicate to this House copies of the minutes of evidence and proceedings, together with the documents deposited, in the case of Preston's Divorce Bill [Lords].—[Mr. Morison.]

METROPOLITAN WATER BOARD (VARIOUS POWERS) BILL.

Reported, with Amendments; Report to lie upon the Table, and to be printed.

AGRICULTURE AMENDMENT BILL [Lords].

Reported, without Amendment, from: Standing Committee A.

Report to lie upon the Table, and to be printed. [No. 148.]

Minutes of the Proceedings of the Standing Committee to be printed. [No. 148.]

Bill, not amended (in the Standing Committee), to be taken into consideration upon Thursday.

Orders of the Day — UNEMPLOYMENT INSURANCE [PAYMENTS].

Considered in Committee.

[Sir E. CORNWALL in the Chair.]

Motion made, and Question proposed,
That for the purposes of any Act of the present Session relating to insurance against unemployment it is expedient—

(1) To authorise the payment, out of moneys provided by Parliament, of such an increased contribution towards unemployment benefit, and any other payments to be made out of the unemployment fund as will become payable if the rates of contributions to be made by employers and employed persons are raised in the case of men to one shilling and three pence and in the case of women to one shilling and one penny per week, but not exceeding one-quarter of the aggregate amount of such contributions received in any year;
(2) To authorise the Treasury to make, for the purpose of discharging the liabilities of the unemployment fund under the Unemployment Insurance Acts, 1920 and 1921, as amended by the said Act, advances out of the Consolidated Fund not exceeding at any time twenty million pounds, and to borrow money for such advances by the issue of such securities as the Treasury think proper, the principal of, and interest on, any such securities to be charged on and payable out of the Consolidated Fund."

Lieut.-Commander KENWORTHY: I waited to see whether the Minister of Labour would rise to explain this Resolution. I waited in vain. I could not allow the Resolution to go through sub silentio without making some protest. A sum of £20,000,000 is involved, and I propose not only to protest—

The MINISTER of LABOUR (Dr. Macnamara): The Resolution gives only-borrowing power.

Lieut.-Commander KENWORTHY: I see. We are not to spend this money, but only to borrow it. I suppose we have not got it in the Treasury, and we are not asking for leave to spend it, but to borrow it. Yet when we have got it we shall spend it. The right hon. Gentleman will no doubt tell us that unless he gets this Resolution, unemployment benefits will cease. I took the precaution to hear his
explanation when the Bill was introduced, and I gathered then that the fund is bankrupt. With that sort of plea the Government hope to damp down all criticism, although I do not think it will have that effect. It is very unfortunate that we are not carrying out our undertakings with, regard to unemployment insurance. I know that the right hon. Gentleman in his heart regrets that as much as any of us; he regrets having to cut down the amount of the benefits. That cutting down will hit particularly those men who, owing to their diligence perhaps, and to their being good workmen, have retained employment until recently. They will get a reduced benefit, whereas those men who, perhaps because they were inferior workmen were the first to be discharged, have enjoyed the greater benefit paid in the past. Without hesitation I declare that that is a great breach of faith, and it will be remembered against this Government with many other breaches of faith. We are apparently presented with the Government's only alternative for the state of depression in which the country finds itself.

The DEPUTY-CHAIRMAN: This is not a time for discussing the Bill or the principles of the Bill. The Resolution refers only to the method of finding the money, and it is only that phase of the question which is now open to discussion. We cannot range over the whole of the Bill which is now before the Standing Committee.

Lieut.-Commander KENWORTHY: The Government ask leave to raise this money by the issue of such securities as the Treasury think proper; in other words by borrowing to the extent of £20,000,000, if necessary. I object to that proposal, and I hope that all hon. Members, irrespective of party, will support me. I submit that we could raise the money by economies without any further borrowing. The Minister of Labour will say that that is impossible, and that we cannot save £20,000,000. If that is the case Heaven help us all! In view of the fact that there is bound to be a great drop in the revenue because of industrial depression, the Government ought already to have altered much of their policy radically. I do not want to go into details now, but I will draw attention to several directions in which we could save this amount of money. Borrowing will put up the price of money; it will depress our credit, lead
to further drop in the Exchange, and we shall have to pay more for raw materials, cotton and food, from America. Without further borrowing we could save this money. In the first place we could come to a settlement in Ireland which would save this amount and more in a year.

The DEPUTY-CHAIRMAN: We cannot discuss that subject or similar subjects, or we shall be ranging over the whole of the Estimates.

Mr. HOGGE: Is it strictly the ruling of the Chair that on a Financial Resolution you can discuss only the method by which the money can be raised? In my recollection the consideration of a Financial Resolution is one of the opportunities that the House has of discussing the policy of the Bill to be based upon the Financial Resolution. While it may be true that the Chair thinks that my hon. and gallant Friend is going somewhat wide in the illustrations he is using, surely it is not the hard-and-fast ruling of the Chair that the only thing we can discuss is the method of raising this money?

The DEPUTY- CHAIRMAN: A Financial Resolution has to be taken on its merits. Sometimes, for obvious reasons, a wider discussion takes place, and at other times, for equally obvious reasons, the discussion is much narrower. I think that this is a case where the narrower view should be taken of the discussion, because the Bill dealing with the principle for which this money is to be provided is now being discussed by a Standing Committee upstairs, and it would obviously be inconvenient and undesirable that we should carry on here at 4.30 in the afternoon the same kind of discussion that was carried on upstairs this morning in the Committee room. Therefore, in a case like this it is the duty of the Chair to confine the discussion to the narrowest limit.

Lieut.-Commander KENWORTHY: I do not propose to pursue that course. There are Estimates on which money could be saved, and that money could be transferred so as to avoid this borrowing. I admit that to borrow the money is better than to print more paper, and in that respect I can support the Government. In the first part of this Resolution we are raising the amount of the contributions by the employed persons to a substantial extent, and at a time when
all round wages are being reduced. I do not blame the Minister of Labour. He is concerned only with the machinery, and with doing his best to meet the difficulties that arise. But is it not time that he realised that his support of the Government is helping to bring about this state of affairs?

Sir F. BANBURY: I beg to move to leave out paragraph (2), which authorises the Treasury
to make, for the purpose of discharging the liabilities of the Unemployment Fund under the Unemployment Insurance Acts of 1920 and 1921, as amended by the said Act, advances out of the Consolidated Fund not exceeding at any time £20,000,000.
That means that the fund is insolvent and that consequently the taxpayer has to find £20,000,000. It is to that I object. I wish to prevent the taxpayer from being called upon, in view of the circumstances of the country's finances at the moment, to find another £20,000,000 because of the mistakes made by the Government on this unemployment question. I would remind the Minister for Labour that in March last I pointed out to him that what has happened would happen, that he would not have enough money, and that he would be obliged to ask Parliament for more. The right hon. Gentleman then told me that I was wrong, and said that he had £22,500,000 available. I thought that that was insufficient, because the result of giving these doles is not to do away with unemployment, but to increase it. The more there is given away in doles, the more these Resolutions are passed, and the more the taxpayers come forward with money, the more will people continue to do nothing. I am right in saying that this is a fatal proposal, because it will accentuate the evil it is designed to diminish.

Mr. SPENCER: On a point of Order. Is the right hon. Baronet within his rights in discussing those aspects of the question? If he be in order, we shall all want to do the same thing.

The DEPUTY-CHAIRMAN: The right hon. Baronet was not in order.

Sir F. BANBURY: I was speaking on the point of leaving out paragraph (2), and I want to show that the £20,000,000 ought not to be levied. I am endeavouring to recall to the right hon. Gentleman the fact that I told him last March, the 22½ millions he had then in the fund would
not be sufficient, because the dole he proposed to give would increase unemployment. I am now proved to be right, as I generally am, notwithstanding that I am generally in a minority. When a little time has elapsed history always shows the minority in which I was to have been right. Therefore I say, the right hon. Gentleman should be content with the money he can get out of the subscriptions of employers and employed and should not be putting a burden on the taxpayer.

Sir G. COLLINS: Before the Question be put, I should like to know if the Debate will be limited to the one point in the Amendment, or will it be in order to discuss the Financial Resolution generally?

The DEPUTY-CHAIRMAN: The discussion will be limited to the Amendment before the Committee.

Mr. HOGGE: I have listened to the speech of the right hon. Baronet the Member for the City of London (Sir F. Banbury), and I am glad to know from it that he is always right. Despite that, I have absolutely no sympathy with the position he takes up in this matter, although he may be right in the course he proposes to take. He seems much more concerned about getting three times this amount out of the Government for the railways than in getting what is due to the unemployed.

Sir F. BANBURY: It is not due.

Mr. HOGGE: It is due, and my right hon. Friend who is so keen on contracts should know it. There is a contribution necessary from the State in virtue of the contributions made by the employers and the employed. That is a contract into which the right hon. Gentleman has entered along with the rest of us in this House. He now seeks to break that contract with the unemployed after having exhausted all his eloquence in trying to get a sum three times the size of this for the railways. I think we can dismiss my right hon. Friend's argument without worrying ourselves very much as to whether he considers he is always right or always wrong. On the question of this 20 millions, I should like to ask my right hon. Friend the Minister of Labour to state how much borrowing power remains unexhausted.

Dr. MACNAMARA: Ten millions.

Mr. HOGGE: I take it that my right hon. Friend has still power to borrow £10,000,000 for the purpose of dealing with unemployment.

Dr. MACNAMARA: That is correct.

Mr. HOGGE: I think that is quite enough for my right hon. Friend to have, in view of the muddle which his Government is making of this question of unemployment. We should be very chary about giving power to borrow £20,000,000 unless the Committee are satisfied that the Government is competent to deal with the problem. If the Government continues to muddle the problem as at present, they will be forced to come to this House for further borrowing powers. Already the Government has filched no less a sum than £20,000,000, built up by employers and employed in connection with this fund.

Dr. MACNAMARA: What does the hon. Member suggest the Government has done?

Mr. HOGGE: They have filched or taken or stolen—if you want it put bluntly—the reserves built up by the employers' contributions, the employés' contributions and the State contributions. They have used that money only to make the position worse, and they are now asking for power to borrow another £20,000,000. That is to say, they are taking altogether £40,000,000 to deal with a crisis which they are themselves responsible for creating. We want to know, when is the Government going to pay back to the employers and the employed the £20,000,000 they have already taken, so that these people may benefit by the reserve which they created? I do not know whether my right hon. Friend the Member for the City of London, after the reasons which he has given for his Amendment, would be prepared to go into the Lobby in support of a reduction of the amount on other grounds. I believe in keeping the borrowing powers of the Government down, because I do not think the Government is competent to deal with this problem. The history of their dealing with it is one long muddle. We have had Act after Act, and we have not settled it yet, but they have endeavoured by all kinds of devices to escape from their own responsibilities.

Sir F. BANBURY: I did not in any way intend to say that the State should break any engagement into which it has entered. Any engagement of that kind must be maintained, at whatever cost. I should be the last person to suggest breaking such an engagement, but I object to the borrowing of the other £20,000,000 on the ground that it is unnecessary.

Mr. HOGGE: I apologise to my right hon. Friend if I have misrepresented his position. I hope he will agree that this Government, having already taken £20,000,000 out of this reserve, the House should not give it, of all Governments, another £20,000,000, but should take a step which will compel them to come back to the House, and review the whole position of unemployment by reducing the amount which they have power to borrow. If my right hon. Friend will go to a Division on that understanding, I shall be prepared to support the Amendment.

Dr. MACNAMARA: The hon. Member for Central Hull (Lieut.-Commander Kenworthy) was right when he said I should have made clear at the outset what we are asking for here. I am very much impressed with that necessity as a result of the speech of my hon. Friend who has just sat down. If the right hon. Member for the City of London (Sir F. Banbury) will recall it, I previously explained the circumstances which made this Financial Resolution necessary and also made necessary the Bill which is based upon this Resolution. I did my best on former occasions when the matter was before the House to make those circumstances clear, and now let me say again that deepening and continuous industrial depression—which has undoubtedly been accentuated by the position of affairs in the coal industry—has entirely upset the scheme upon which was based the Act of March last. The contributions it was sought to impose in that Act were based upon the calculation that over the whole period from last March to the end of July, 1922, we should have an average of 1,000,000 persons unemployed. With the past industrial history of this country before me and making the closest possible calculation I could, I arrived at that figure which I still regard as having been in the circumstances a reasonable, fair, and sound forecast, as far as any forecast can be sound. The whole scheme ws based on that figure, and the benefits were based on it. That
figure has now been falsified by events. The numbers now run to 2,000,000 unemployed and 1,000,000 on short time. Does my right hon. Friend the Member for the City of London say that he could have foretold that? I do not think so. I followed him with great care, as I always do, in the Debate on that occasion, and while he said that we were too optimistic, I do not think he can now state, "I could have told you in March last that, so far from 1,000,000, you would have 2,000,000 unemployed and 1,000,000 on short time." I do not think anybody could have forecasted the situation which has arisen. At that time the fund stood at £22,500,000 The tremendous drain upon it has brought it down to £5,250,000.

Mr. HOGGE: And what of the ten millions?

Dr. MACNAMARA: I have not got ten millions, but I have borrowing powers to the extent of ten millions. These borrowing powers are set forth in Section 5 of the Act of 3rd March last and we are asking now that that ten millions shall be increased to 20 millions. At the present time, the outgoings of the fund represent round about two millions a week, and that is out of a fund which has been reduced since March last from 22½ millions to five and a quarter millions. The income is only £350,000 because of the very large number of men and women who are unemployed and not paying the contributions. Therefore hard necessity compels us to do as we are doing by this Resolution and this Bill. We are compelled to reduce benefits and increase contributions. Further, this continuous and deepening unemployment to which I have referred has compelled us to make further provision for benefit periods to the extent of six additional weeks between now and the end of October and probably another six additional weeks next spring, beyond that which was provided for in the scheme of March. As regards benefits, which at present stand at 20s. for men and 16s. for women, these have had to be reduced to 15s. and 12s. Here again, it is hard necessity which has compelled us to do that. As regards contributions, at the present time the contribution for men is 4d. a week and that of the employer 4d. a week. In any case, under the Act of March, 1921, on the 4th July these contributions would have become 5d. for men and 6d. for employers.
Because of the drain on the fund, the abnormal unemployment and the exceptional circumstances generally in which we find ourselves, we have been compelled to increase the contributions, not to the 5d. and 6d. set out in the March Act, but to 7d. for men and 8d. for employers. As regards women, the contributions at this moment are 3d. for the woman and 3½d. for her employer. Under the Act of March last those on the 4th July would have become 4d. for the woman and 5d. for her employer. I am now compelled to make those figures 6d. and 7d., respectively. I shall then, on that basis of reduced benefit and increased contribution, run into debt up to a maximum of £16,000,000 between now and July, 1922. But by the close of the insurance year of 1922–3 I shall have paid off that £16,000,000. I am estimating that during the whole of the year before us from July, 1921, to July, 1922, there will be one and a quarter millions of unemployed. There are two millions at this moment.

Mr. HOGGE: There will be more if you stay in power.

Dr. MACNAMARA: We are assuming things will improve and I hope that over the year we shall not carry a heavier burden than 1,250,000. If that is realised, by continuing the reduced benefits and the increased contributions for the year, we shall have paid off the whole of the debt of £16,000,000 maximum—which debt will be £13,800,000 by July, 1922—by July, 1923. What would be the effect of the right hon. Baronet's Amendment? This fund would run dry during the coming autumn. There could be no other effect. I have £5,250,000 still, but I was bound in the interests of the poor people to take time by the forelock. Somewhere about September I would have got to the limit of my borrowing power, and the whole thing would come to an end. That is a state of things which my right hon. Friend is the last man to lightly contemplate. I do most earnestly hope now that I have made it clear that my right hon. Friend will not press his Amendment, because it would bring the whole thing to an end in a most disastrous way just when the winter was coming on. I press upon him the extreme un wisdom and inexpediency of proposing to keep the borrowing power down to that which is already provided in the Statute. As regards the comments of the hon. Member for East Edinburgh (Mr. Hogge)
that he will associate himself with the Amendment, let him face the consequences, of that act. Let him charge it against me as my muddle, but he will have to face the consequences of his own proposal. I do not think the great bulk of the Committee will support him. We have got to carry on.

Mr. HOGGE: Get rid of this Government.

Dr. MACNAMARA: We have got to make provision for the unemployed. After all, that is far more important than partisanship.

Mr. HODGE: I cannot associate myself either with my hon. Friend sitting beside me (Mr. Hogge) or yet with the right hon. Baronet the Member for the City of London (Sir F. Banbury). My opposition would be on entirely different grounds. My ground is that the borrowing powers are not sufficient. Something has been said in this House from time to time by the right hon. Gentleman with respect to the sanctity of agreements. The Unemployed Insurance Act of 1920 offered those who paid certain benefits. The Bill that the Government has introduced and which will be based on this financial Resolution is breaking that contract.

The DEPUTY-CHAIRMAN: That is going into the merits of the Bill, which we have discussed on Second Reading. We cannot discuss now whether this is a breach of contract in regard to previous legislation. We are now dealing only with money.

Mr. HODGE: I do not intend to discuss the Bill, but I am surely entitled to make that reply as far as the speech of the right hon. Baronet is concerned. Be that as it may, I think the question of contract does arise so far as this Resolution is concerned. The Member for East Edinburgh pointed out that under the 1911 Act a fund of £22,000,000 had been accumulated. Some of those who contributed have never drawn any money out of the fund, and now that they are coming on to the fund they will not get what they have really paid for. The right hon. Gentleman the Member for the City of London declared that this granting of borrowing powers for £20,000,000 would do exactly what he had prophesied, namely, that the more you gave unemployed pay the more you created unemployed. In the society that I represent
we have 100,000 members idle. If the hon. Baronet finds employment for them they will give up their pay to-morrow. I do not think anyone in this House who knows me would say I was a revolutionary in any shape or form, but I do say this, that the greatest danger to men like the right hon. Baronet is the starvation of masses of the people of this country. That is going to give you revolution. I love the old things, the old customs of this House, and I have a certain love for the antique conservatism of the right hon. Baronet. A telegram has just been put in my hand from my right hon. Friend the whip of the Labour party, informing me that the question of this unemployed resolution has been discussed at Brighton, and that the conference has unanimously decided that the proposals of the Government to reduce unemployed pay should be fought to the bitter end. I can only express the hope that I expressed on Second Reading, that the Government may even yet realise that it would be better to find an extra £10,000,000 for the purpose of maintaining the 20s. benefit which is at present paid, because when one takes into account the value of money to-day, 15s. is not an equivalent amount to the unemployed pay previous to 1914. I therefore say, that as far as we are concerned, we shall support the Government with respect to the Resolution, although we deplore the fact that they are raising contributions and at the same time reducing benefits.

Sir G. COLLINS: The question before the Committee is whether the powers that the Government are taking in the Financial Resolution to borrow £20,000,000 are sufficient for the purposes of their Bill. I think I have stated the question accurately. The Resolution asks power to borrow £20,000,000, and the Minister of Labour has stated that the total liability of the taxpayer through the operation of this Bill is some £6,230,000.

Dr. MACNAMARA: I do not follow that.

Sir G. COLLINS: I will deal with that point in a moment. The point before the Committee is, is £20,000,000 sufficient? I shall in my observations address myself directly to that question, and endeavour to show to the House that the powers the Government are taking in their Resolution are insufficient for the purposes of their Bill. The Committee is, first of all,
entitled to ask itself what are the credentials of the Minister of Labour. Is his past record such that he can come to the House and ask for more money in view of his recent remarks on the Second Reading or another stage of the Unemployed Bill in February last? Let me remind the Committee that, as recently as the 24th February, 1921, the Minister of Labour came down to this House and stated:
There is in the Unemployment Fund over £20,000,000, and we are quite entitled to deal with that, because it was the high state of employment during the War, and the £62,000,000 out-of-work donations paid since the close of hostilities to persons, many of whom would otherwise have come on the Fund for benefit, which have kept the Fund at £20,000,000."—[OFFICIAL REPORT, 24th February, 1921; col. 1238, Vol. 138.]

Dr. MACNAMARA: What column is that?

5.0 P.M.

Sir G. COLLINS: My first point is the Minister had no right to encroach on that Fund. This Fund was built up to a very large figure during the War. There was very little unemployment when this Fund was built up. Yet so recently as February last, when everybody knew there was bad trade coming, or, rather, when trade was bad already, the Minister took money from that Fund and with that money increased the unemployment benefits. Further on, in the same column—I direct the attention of the Committee to these words—he said:
I think that I have made a perfectly safe calculation.
It was a perfectly safe calculation ten weeks ago, and yet this afternoon he comes to the Committee and asks for further borrowing powers.

Dr. MACNAMARA: Will the hon. Member read the next column?

Sir G. COLLINS: Yes. On a basis of 9½ per cent., the benefits proposed under this Bill could be given. I quite agree.

Dr. MACNAMARA: I went on to say that if the percentage of unemployment went beyond an average of 9½ per cent. there would be a deficiency.

Sir G. COLLINS: I am not entering into the interpretation of the Minister of Labour. If he will bear with me for a few minutes, I am pointing out these facts before I come to his basis for this Resolution. I am endeavouring to draw
the attention of the Committee to statements in February last to find out whether his hopes for the future are likely to be more correct. I come therefore, with these preliminary observations, to the actuary's report on the present Bill. This report has not yet been referred to this afternoon. The actuary employed by the Government states:
I am advised that for the purpose of the present estimate it should be assumed that in the first of these two years 1,250,000 persons on the average will be constantly unemployed.
The actuary has been directed by the Government. Further on, however, the actuary states:
There is, indeed, a considerable risk that it will be exceeded"—
that is, the number of unemployed—
unless in July, 1921, onwards there is a continuous and substantial improvement in the industrial situation.
That is the point to which I am anxious to direct the attention of the Committee this afternoon. The finance of this Bill is based on certain facts. The finance in February was also based on certain anticipations. The February anticipations have broken down, apparently due to the coal lock-out. The main trouble is this: What we are faced with to-day is not due to the lock-out in the coal industry, but to the general policy of the Government which causes unemployment. I know that the Debate this afternoon is limited to the specific question whether the £20,000,000 borrowing powers are sufficient for the purpose. I put it to the Minister of Labour that the amount is insufficient for his purpose and that in a very few weeks or months this fund will be bankrupt. He had a surplus of £20,000,000 on 24th February, and he has told the Committee this afternoon that that £20,000,000 has dwindled to £5,000,000.

Dr. MACNAMARA: Five and a quarter millions.

Sir G. COLLINS: Five and a quarter millions. Until the general situation improves, until the Continent is able to consume British goods, until the Government alter fundamentally their policy of imperialism in distant parts of the world—[An HON. MEMBER: "Where?"]—in spending money in Mesopotamia and large sums of money on naval works in distant parts, the causes create unem-
ployment at home, which will make this fund bankrupt and which is making it bankrupt will continue. The Minister of Labour may smile, but he has raised hopes in the minds of 3,000,000 of people, and at least he will agree with me that these hopes have been dashed to the ground, and there is bitter disappointment amongst 3,000,000 men and 3,000,000 homes. For many long months and years in the House I have spoken on the subject of expenditure, and endeavoured to direct the attention of the country to the effect of the borrowing policy upon the industrial situation at home. Until the Minister of Labour introduced this Bill, I am afraid that my words fell upon deaf ears. Throughout the country our people during the War and since the War have had large wages. They have not realised the close connection between Government policy and their own homes. They are cause and effect, however they came about. At last, the millions spent have brought this unemployment about, have caused the Minister to reduce the benefits after a long period of unemployment and at a time of all times when the purse at home is strained. He comes to the House and, rightly so, asks for increased contributions from the employers and from the employés. He can only find £6,000,000 from the State for unemployment insurance, but there can be millions found for other purposes. Six millions for the unemployed! The Minister of Labour rather questions that figure.

Dr. MACNAMARA: I do not recognise the £6,000,000.

Sir G. COLLINS: I am reading from paragraph 6 of the actuary's report on the Insurance Fund. The cost to the Exchequer under the scheme, as amended by the Unemployment Insurance Act, 1921, was £5,191,000; and further on, at the end, just above the initials, there is this:
The net addition to the liabilities of the Exchequer in respect of 1921–22 is thus £1,047,000, and in respect of 1922–23 £1,233,000.
Does the Minister of Labour know his Bill?

Dr. MACNAMARA: Yes, certainly.

Sir G. COLLINS: The right hon. Gentleman seems to question the figure I give, but it is absolutely correct. The total cost to the Exchequer of the un-
employed insurance schemes this year is £6,000,000 odd. Will the Minister of Labour correct me if I am wrong? The point I put is that the money the Government are finding is insufficient for their scheme. This burden on the Exchequer is small in comparison with the amount the Government are finding for other purposes in Palestine and other places. The Minister of Labour, owing to events which, I admit, he cannot control, has been forced to reduce the unemployment grant. I hope, if the Government are going to reduce the unemployment grant, that they will at the same time practice an all-round economy in all Departments of the State, and I can assure him there will be no heartier supporter for that policy than myself.

Mr. ORMSBY-GORE: I am surprised that the hon. Gentleman who has just sat down, if he felt so strongly about the imperialistic ventures which we have undertaken for our own health and our own good, did not vote against the Estimate of £27,000,000 which this House passed last week. To quote it now at this stage, when he had an opportunity to vote against it last week, seems to me rather out of order on an occasion of this kind.

Sir G. COLLINS: When the Vote is challenged at a later stage of the Session, I shall certainly vote against it.

Mr. ORMSBY-GORE: It cannot be raised again; it has been passed. It cannot possibly come up again, and it is really late in the day for the hon. Member to say that he wishes to do away with an obligation under the League of Nations, in order to get more money for something else. Surely we cannot consider this Financial Resolution in that way. It is perfectly hopeless if you are always going to throw Palestine into the balance against something else. It is an impossible way to conduct finance. What you have to do is to scrutinise carefully the demands of Ministers on all occasions, such as the statement of the right hon. Gentleman this afternoon. The right hon. Gentleman the Minister of Labour this afternoon proceeded to give what I may call his customary breezy arithmetic. The breezy arithmetic was this: "At the present moment I have £5,500,000 cash."

Dr. MACNAMARA: Five and a quarter millions.

Mr. ORMSBY-GORE: I will leave out the fraction—say, £5,000,000 cash. He has got borrowing powers up to £10,000,000; he is reducing the benefit, he is increasing the contribution, and yet he will come to the end of his tether altogether by September. It is a remarkable fact that, between now and September, he will have got through £15,000,000, and between September and next July, 1922, he said, "I shall be £16,000,000 down." He is going to spend £15,000,000 between now and the 1st September, and only £6,000,000 between September and next July. How can he know that? How can he possibly tell that? All his previous estimates have been falsified by results and facts, and to come to the House now and to encourage the House to believe that in July, 1922, this £20,000,000 will all be paid back is simply beating the air and so much waste of time. All that breezy optimism and breezy arithmetic is not worth the paper it is reported on. I am fairly certain that the right thing to do is to leave him with his present borrowing powers, and, when he is bankrupt, then let him come to Parliament to get more. That would be the right time to-come to Parliament, and not to make fantastic estimates as to what will happen in 1923 and as to what will be the position in July next year.
The story of the finance of this insurance fund is no very great credit to this House and to the arithmetical acumen of the various people who estimate it, and the one who has always been brought forward by the Minister from the Ministry of Labour as his financial adviser. We are getting a. little sceptical about all these figures hurled at our heads and about the way the finance of this scheme has been arranged. I am perfectly certain that they are merely piling up the debt on this fund, and it is going to be a stranglehold on the industry, employers and workmen alike, of this country for years to come. We have got to deal with this problem. We have to go to the root of it and attack it with an entire financial reconstruction. All this borrowing—I am only on paragraph (2) of the Eesolution—is bad finance, and is built entirely on a foundation of shifting sand. How do we know that there is going to be this trade revival? How do we know there are going to be 5,000,000 unemployed? It is really,
at the present moment, quite impossible for this Committee this afternoon to pass this Resolution on the easy assurances of the Minister of Labour. We have had too much experience of these things in the past. I shall take the first opportunity of registering my protest against the financial jugglery behind all this and the false estimation by voting against paragraph 2 of this Resolution.

Mr. HAYDAY: I hope the Committee will agree to paragraph (2), as far as it goes. I disagree entirely with those who are opposing this Sub-section. Surely to goodness, if it was felt, with the position before us in March, 1920, that we could borrow £10,000,000 with £22,500,000 in reserve, and an anticipation that we might find ourselves overwhelmed with unemployment, we can make the present provision. This was taken as a proper precaution. There was not the same kind of argument in the House at that time, as now, when the position has grown worse, and the Department has estimated that they will possibly draw upon or borrow £10,000,000, the balance having diminished to £5,250,000. Now that we are touching the rate of benefit and making a severe charge for increased contribution, and we feel that we cannot recover from this abnormal period with any degree of certainty, we ask: if it was right to borrow £10,000,000 with £22,000,000 in reserve, whether £20,000,000 is too much to place at our disposal with only a balance of £5,250,000, the country being faced with the same rate of unemployment for the next few months? Can anybody suggest, does the hon. Member for East Edinburgh suggest, that we should come to the House again? Is it really suggested that month by month, as further monies are required to meet our obligations, that this House should be made the cockpit of party discussions while the people outside are going short of unemployment benefit? Are they always to be used as the central argument for party advantage? That would happen, as it does happen, because you would have a position like this created if there is no Autumn Session and in the middle of the Recess the money ran out. Would you call the House of Commons specially together to determine whether another £4,000,000 or £5,000,000 should be advanced, and perhaps find before you could discuss it that the payment had
suddenly stopped! This is a Farrowisation of the Unemployment Fund with all its worst possible features. If I were receiving unemployment donation and suddenly found at a crisis that my income was stopped because Parliament could not trust its own Department with a surplus in reserve, I should feel inclined to take some more definite and strong action than was perhaps constitutional. I should do something to feed my children whatever might happen to me. I do not believe with my hon. Friend behind me that £20,000,000 is sufficient. My quarrel is because it is only £20,000,000—

Mr. ORMSBY-GORE: Hear, hear!

Mr. HAYDAY: The argument is that if £10,000,000 is a right margin to provide with a balance of £22,500,000, that £20,000,000 now is not sufficient to provide seeing the reserve is now down to £5,250,000. Hon. Members say, "Vote against it." It is urged that this expenditure is part of the great wasteful policy of the Government and that Parliament should not grant another £10,000,000. In fact, that there should be nothing for the unemployed.

Mr. HOGGE: Nobody said anything like that. We have said quite explicitly that we are in favour of the State fulfilling its bargain. We are not prepared to trust them any further in view of the Government figures. The Minister who is responsible has got borrowing powers for £10,000,000 plus what he has in hand. Our position is this: that until—

Mr. HAYDAY: I do not know to what extent this may be looked upon as an interruption of something I have said. If it be a conversation between the hon. Member and the right hon. Gentleman the Minister for Labour—

The CHAIRMAN: Of course, if the hon. Gentleman does not like to give way, nobody else can rise. But, as I understood it, the hon. Member for East Edinburgh wanted to explain something that he said, and it seemed there was no objection to that.

Mr. HOGGE: I will do it quite shortly. None of us here have said that we are agreed that more money is not required. The hon. Gentleman ought not to be un-
fair. Our position is that we are not prepared to give up Parliamentary control over Government expenditure.

Mr. HAYDAY: Quite so. You trust them with £10,000,000 when they have a reserve of £22,500,000, but you will not trust them with £20,000,000 now that the reserve has been reduced to £5,250,000. If you are so deeply interested as to desire the Department to carry out its bargain then let them draw less or more of the £20,000,000 as they desire. Do not restrict them to any figure if your main desire is to see that the Government side of the contract is maintained in meeting the obligations to pay unemployment benefit. That is all I desire to say except to ask your ruling, Mr. Chairman, whether we may make reference to paragraph (1) or whether that will be a separate matter for discussion.

The CHAIRMAN: We have now got to paragraph (2).

Mr. A. HOPKINSON: The Minister of Labour said that nobody had told him there was going to be this state of unemployment, or that the coal dispute would take place, and on that ground he challenged the whole of the Committee to say whether they had given him any warning or not. During the course of the Unemployment Bill that warning was given to the right hon. Gentleman. I myself gave it vigorously. Not only here, but I gave it to the Press of the country and have been giving it for the last two years. The whole fallacy of the position of the right hon. Gentleman is that it is no use coming here and asking us repeatedly for further and further borrowing powers for specified amounts, because the whole basis of his policy and of public unemployment insurance is that the deficit will naturally year by year go on increasing. The whole policy of unemployment insurance has been leading to that result. That type of legislation and policy in industrial affairs always has led to it. It led to it in France. It led to it in other cases. [HON. MEMBERS: "Speak up!"] I was pointing out that that policy inevitably results in increasing deficits and it always will do so, even with the original payments and benefits and still more with the increased payments and reduced benefits. In collecting that money the right hon. Gentleman is reducing the capital of the employer
regularly week by week. He is reducing the capital of the country at the same time. If you reduce the capital of the country you increase unemployment, and therefore I say—

The CHAIRMAN: The argument of the hon. Member is more appropriate to the whole Bill than to the specific Amendment which relates to borrowing powers.

Mr. HOPKINSON: I bow to your ruling, Sir. But we object to the grant. We object to these borrowing powers being asked for, because we know it is inevitable that the right hon. Gentleman will ask for more in the autumn and more again in the spring of next year. We know that by his own showing and arithmetic. The hon. Member for Greenock (Sir G. Collins) read the report of the Government actuary. The Government actuary was told at the start that he had to reckon on an average of 1,250,000 unemployed in the next 9 or 12 months. Surely if you are going to employ an actuary in a calculation of this sort you ought to allow the actuary to form his own basis of calculation? What is the actuary for? If you take a basis of 1,250,000 unemployed to the actuary you have done his work and the rest is simply a matter of ordinary arithmetic. Any Member of this House could do the thing. I could do it myself. Once we have got the acturial basis which is the anticipated unemployment during the next 12 months, the rest is easy. As I pointed out here every night when the Bill was before us the 1,250,000 of unemployed estimated for is certainly nothing more or less than a guess, and from all the signs of the times an extraordinarily bad guess. As bad a guess as the guesses upon which the original Bill were founded. They were guesses from the beginning. It is said: How can we anticipate? Everybody whose business it is to study industrial affairs knew there was going to be a coal dispute just as they know that each blunder of the Government in the matter of the controlling of industry in one form or another will cause a dispute and more unemployment.
Why, really, the right hon. Baronet the Member for the City of London (Sir F. Banbury), the hon. Member for East Edinburgh (Mr. Hogge), and myself, and, I think, some others, oppose the Government on this matter is because we feel that we have no actuarial foundation
whatever, and that the whole thing is based upon guesses which have always been bad guesses, based upon anticipations which have never yet been fulfilled, and based upon a peculiar degree of optimism in the commercial community of the country. Some of us knew all along that the whole thing was hopeless, and I would suggest to the right hon. Gentleman that he should really look into the meaning of this problem and consider it by the side of all these guesses, calculations, and so-called estimates and consider to where it is running you. It is going to run you into continual and increased borrowing, and there will be no end to that state of things. The hon. Gentleman opposite (Mr. Ormsby-Gore) spoke about shifting sands. It is not a question of shifting sands. The metaphor is wrong. It is a question of running down steep places to the sea with a constantly accelerated pace. Therefore I hope the Committee will pay some attention to what the right hon. Baronet opposite has said, and what the Member for East Edinburgh has said, and possibly even to my words. I hope the Committee will free their minds from what I call cant. We have heard from some hon. Members that all our troubles are due to the fact that we have spent a few millions abroad. That is what I call cant. We see the right hon. Gentleman on the Front Bench getting up and picturing starvation and all that sort of thing, as if pity for starvation was purely a quality confined to the Labour Benches.

Mr. HARTSHORN: It looks like it!

Mr. HOPKINSON: Would hon. Gentlemen kindly give some of us credit for not wishing to starve our fellow-men? We are wishful for a change in the policy of the Government by which we can save millions. Instead of continually increasing the troubles of this country and of the working-classes particularly, one would try to impress upon the Government the pursuit of a policy which has got some end to it, and which has some chance to help the country to recover its prosperity. If only the Government could stand out of the way and not be continually reducing the capital available by all these socialistic devices of taking the money from the thrifty and distributing it amongst the thriftless we might be able to pull the country round
and avoid some of the worst disasters which are facing us. I hope the Committee will regard this as a matter of economics and dismiss all those sentimental ideas which have led the country astray and produced the present situation.

Sir F. BANBURY: I am much obliged to the right hon. Gentleman for his explanation, although it did not convince me. As I understand the figures, he has got £5,250,000 and power to borrow £10,000,000, making £15,250,000. He estimates that by July next year there will be a deficit of £16,000,000. What will really happen will be that he will be nearly £1,000,000 short. If that is so, why on earth should he not be content with the powers that he has got, and if he finds that those powers are not sufficient he has between now and the 15th of August, and if in the meantime his financial position becomes very bad, he can come to the House and ask for a further sum.
What is the advantage of that? Firstly, that we keep some control over the expenditure and over the Minister. The second advantage is that we shall have an opportunity of reviewing the circumstances and finding out how far we have been committed to a liability which we may not be able to discharge. I am afraid that I cannot reply to the right hon. Gentleman the Member for Gorton (Mr. Hodge), because it would not be in order to discuss any alteration of the benefits, but I presume it would be in order just to say that no doubt that is a violation of the agreement which was entered into. The answer is, what on earth could you do? There was not the money and you could not carry out the obligations you had entered into. If my Amendment is carried there will be no cessation in the unemployment donation as it is given now, but if the right hon. Gentleman finds that he will require more money, all he has to do is to come down to the House.
I agree with the hon. Gentleman opposite as to the vague guesses about the final result of this fund. Let me point out that the Minister of Labour is not alone in underestimating his requirements. Every single railway company's superannuation fund has been in exactly the same position. Whatever faults I have got, and I do not doubt they are
many, no one will say I do not endeavour to speak the truth. There is not the slightest chance of me being offered any office under the present Government, and if I were offered a position I should not accept it. Every railway superannuation fund has gone through the same experience, and they have had to cut down the benefits. Every one of these funds has had to do the same, because too sanguine views have been taken about the amount of the contribution and the number of people who will benefit. The same thing is going to happen here. I believe the giving of these unemployment doles or donations will be the very means of perpetuating unemployment. The more you give the more will be required, and the greater the sum that will have to be found by the taxpayer. My proposition is that the right hon. Gentleman in another two months' time should give us the pleasure of his society again on the Treasury Bench, and inform us what position he is in, and if he wants more money, then it will be in the power of this Committee to give it to him.

Mr. SPENCER: The argument which has been put before us is that if you give these doles you will only increase unemployment. If the right hon. Gentleman opposite who used that argument is correct, then we are going to perpetuate unemployment until we are all unemployed. In my opinion, we shall get through this period of depression, and we shall come again to something like a period of prosperity as we have done on all other occasions. In my view instead of talking this way we should try to meet the depression, because it is only a state of things which has followed all great wars. I know the depression is somewhat alarming, and it is out of all proportion to anything that has happened before, and consequently we have more unemployment than we have ever had previously. This has been aggravated by the fact that we have an unparalleled coal strike—I do not mean a strike, I mean a stoppage. I am so accustomed to hearing hon. Gentlemen opposite call it a coal strike that I was led to make the same mistake. My point is that there is a stoppage in the coal trade, and it has led to a far greater degree of unemployment. That has to be met, and the question is, What is the best way to meet it? The right hon. Gentleman thinks it can be best met by preserv-
ing the right to borrow £10,000,000 instead of increasing it to £20,000,000.

Sir F. BANBURY: For the time being.

Mr. SPENCER: We had £22,500,000 to start with in March, but that has been reduced in two months to £5,250,000. It is fair to say that if unemployment continues at the present rate, in about eight weeks' time not only will the £5,250,000 be exhausted, but a considerable amount of the £10,000,000 which the right hon. Gentleman is asking for power to borrow will also have been exhausted. The income is about £350,000 a week, and if the depression continues the right hon. Gentleman cannot look forward to any further increase so far as subscriptions are concerned. If you take the figures, the Department is paying out about £2,000,000 per week, and if we were to have a further period of 16 weeks' depression of trade similar to the present time £32,000,000 would be required, and the right hon. Gentleman would have £20,000,000 to borrow and he has got £5,250,000.
He would get about £7,000,000 by way of subscriptions and contributions, and that would give him about £32,000,000 which would be just about sufficient for 16 weeks. That is with the borrowing power to raise £20,000,000, and if you cut that down to £10,000,000 you are very seriously jeopardising the financial stability of the scheme. Personally, I do not think the right hon. Gentleman is taking a sufficiently large sum, and if there was a proposition to increase it I should be disposed to support it. I have already stated that I think the right hon. Gentleman is too pessimistic, and he ought to mortgage the future to a far greater degree, and instead of increasing liabilities which are not going to be met and extinguished, if he were to mortgage the future to a far greater degree we should find with the return of prosperity we should be able to wipe out the mortgage.

Dr. MACNAMARA: My only object in asking for these powers is to make this fund solvent. My right hon. Friend the Member for the City of London (Sir F. Banbury) associated himself with the suggestion that we are now committing a breach of faith.

Sir F. BANBURY: I said I did not wish to argue that point because I thought it was out of order, but on the face of it that does appear to be the case.

Dr. MACNAMARA: My hon. Friend the Member for East Edinburgh (Mr. Hogge) said he was quite satisfied that we were breaking contracts. In this very scheme which we are told is a breach of faith I am providing for two additional periods of six weeks in order to meet the grave period of unemployment with which we are immediately confronted, and may be confronted with next spring.

The CHAIRMAN: The right hon. Gentleman is not in order in discussing that question, and I have already prevented several hon. Members from discussing it.

Sir F. BANBURY: Do I understand that the explanation is that there have been variations before, and the variations have been upward and now they are to be downward?

Dr. MACNAMARA: I will refer to Section 93 of the original Act, which says:
If whilst any part of any such advances outstanding it appears to the Treasury that the unemployment fund is insolvent, the Board of Trade shall, if the Treasury so direct, by order, make such temporary modifications in any of the rates of contribution, or the rates or periods of unemployment benefit, and during such period, as the Board of Trade think fit, and as will on the whole, in the opinion of the Treasury, be sufficient to secure the solvency of the unemployment fund.
That was the original agreement.

Sir F. BANBURY: I am much obliged to the right hon. Gentleman.

Mr. CAIRNS: Listening to the Debate which has been proceeding one is led to wonder what kind of question is being discussed. Having had experience of unemployment myself, I am perhaps in a different position from a majority of those who have spoken this afternoon. I am inclined to ask, are we talking about dogs or about men? There are some hon. Members who have spoken who seem to have more respect for dogs than for men. May I remind them that we are talking about human beings—about millions of men who have been out fighting for their country and who have saved their country. They are now out of employment. If it rested with me I would not place any limit on the Ministry in regard to money. Good heaven!—I hope the Committee will excuse my language but I cannot help it—I signed 60,000 miners' certificates for men who went out to fight for their country. I know what is
coming on this winter. Coming events cast their shadows before them. There will be thousands of our men out of work by no fault of their own. I was out for 12 months through slackness of trade. I did not want a dole, I wanted work. Our men do not want doles. The hon. Member for Mossley (Mr. Hopkinson) suggested it was all cant that we are putting forward. May I as a working man say I never refused any work, and I like to consider that my fellow men are of the same stuff and are Britons. You are proposing to give them 15s. a week—

The CHAIRMAN: The hon. Member is not in order in dealing with that point. His arguments must be directed to the question whether the Treasury shall be allowed to borrow a further sum of money. The first part of the Resolution has already been dealt with.

Mr. CAIRNS: It makes it rather difficult for me if I cannot speak on that particular point. I am sorry there are men in this House who are opposing the proposal of the Ministry. I hope the right hon. Gentleman will get a thumping' majority for it, and if he asked for £40,000,000 instead of £20,000,000 it ought to be granted to him.

Mr. HOGGE: May I add one word to explain the position of those who have spoken in the sense I have spoken. We are asked to give the Government power to borrow a further £20,000,000 and hon. Members behind me are declaring that that is not nearly enough. If their view is the correct one, surely the sooner we have an opportunity for reviewing the situation, the better. That is why we are in favour of granting power only to borrow a lesser amount.

Dr. MACNAMARA: And you would be wiping it out altogether.

Mr. HOGGE: No. We say that the Government which already has £5,250,000 in hand would, if it were granted power to borrow £10,000,000 only, have plenty of money to go on with until they are in a position to come again to the House with proper figures, so that it may review the whole situation. If it is true that the Government expect to have 1,250,000 unemployed right through until July, 1922, then it ought not to remain in office. It contemplates rising for six months during which time there will be this amount of unemployment every week.
It is an impossible situation. By supporting the Amendment the Committee will not be opposing the grant of further borrowing powers—unless, of course, it is desired to make a party point of it, but by carrying the Resolution it will give the Ministry enough money up to the time the House is expected to rise and then the Government will be facing the unemployment problem during the Winter months when it is most acute. What we desire is that the House of Commons should keep its grip upon public funds and should insist on the Government placing the House in possession of all the facts in regard to unemployment before increased borrowing powers are given it. Is there any member of this Committee who is opposed to the unemployment benefit?

Lieut.-Colonel CROFT: We are opposed to increasing it.

Mr. HOGGE: If the hon. and gallant Member had taken the trouble to read the speech I made when I opposed this Bill on the Second Reading he would have seen that I based my opposition on the ground that it was false economy on the part of the Government to reduce the amount. Do not let the House make any mistake. If power is to be given to the Government as is suggested in this Resolution, they are going to be enabled to deal with the unemployment problem at a time when the House is not sitting, and all the Committee will be doing by passing the Amendment will be to keep the House of Commons grip on the finances of the nation.

Mr. WATERSON: I would not have spoken but for what has fallen from the last speaker, who has been trying to eat his own words in his endeavour to justify himself, an attempt in which he miserably failed. This is not merely a Government question. We have to deal with a very important situation affecting the lives of many of our people, and particularly of our children. After listening to the words of the right hon. Member for the City of London (Sir F. Banbury) and the arguments he adduced in support of his Amendment, I sincerely hope he will divide the Committee in order that we may know exactly where we stand and who are the sheep and who are the goats. May I respectfully remind the right hon. Gentleman that the burden is not to fall
solely on the Government and the country, but that a certain proportion of the liability has been placed upon those who may receive this unemployment benefit? May I point out that the waiting period has been extended from three to six days, that the unemployment grant has been reduced, and that an increased contribution is also to be paid by the worker. The liability therefore is not all on one side. I agree there is something in the argument that this House should keep complete control over public finances, but surely if it has been found possible to trust the Minister in the past there is no reason why at this juncture we should now withhold our confidence from him. I hope that the Resolution will be agreed to unamended in order that we may give to our fellow workers some little comfort, a little more security than they now have, and a little more happiness in their cottage homes.

Amendment negatived.

Main Question again proposed.

Mr. HAYDAY: I desire to ask the ruling of the Chair on a point which I wish to raise. Assuming that the first Clause of this Resolution is carried, will that preclude the Committee upstairs from discussing and deciding on any variation of the rate of contribution? The Government contribute one-fourth of the total. It is proposed to increase the adult male contributor's payment from 4d. to 7d., and the employer's contribution from 4d. to 8d. In the Resolution as it stands the Ministry is required to meet one-quarter of the charge. We have an Amendment down upstairs reducing the amount paid by the contributor and increasing the amount to be paid by the State. Can we discuss that upstairs in the event of this Resolution being carried?

The CHAIRMAN: That will rest with the Chairman of the Committee upstairs. This Resolution lays it down that a certain sum shall be payable out of moneys provided by Parliament, not to exceed one-fourth of the aggregate amount of the contributions. As to the application of the particular Amendments upstairs, it is not in my power to rule.

6.0 P.M.

Mr. HAYDAY: It follows, therefore, that if we are successful in reducing the
payment by the contributor we should get a reduced rather than an increased contribution from the State, because it would only be one-fourth of the total. In face of a reduction in benefit from £1 to 15s.—namely, a reduction of 25 per cent.—the contribution is being increased by 75 per cent. At the moment the contributions are 4d. from the adult male, 4d. from the employer, and 2d. from the State, making a total of 10d. per week. The suggested scale is 7d. from the adult male, 8d. from the employer, and something under 4d. from the State. We believe that to be one of the fundamental defects of the Act which has largely contributed towards the financial breakdown. There are three parties to the scheme, all of whom are benefiting to some extent. The man benefits by his receipt of an amount which should be sufficient to keep him physically able, when the employer again requires his services, to give to that employer the result which has accrued from keeping his physique up to standard by the benefit received. The benefit to the State can scarcely be measured in terms of words. Assuming that there were no unemployment scheme at all in the country, and you had 3,250,000 people either totally or partially unemployed, does anyone suggest that we should have gone through the period from last November to the present time without having to face some very serious consequences? Does anyone suggest that the State has not benefited as a partner in this scheme by reason of its being able to give benefit to the unfortunate third partner in this great undertaking or contract? I suggest that the State ought to pay at least one-third of the total contributions, rather than one-fourth. It is because of the possible, bearing that this may have upon our Amendments which are designed to secure that result that I would, if I should be in order, move the deletion of all words after—

The CHAIRMAN: No Amendment is now possible. The Amendment proposed by the right hon. Baronet (Sir F. Banbury), to leave out the latter part of the Resolution, was negatived, and therefore, as the latter part stands, the former part stands also. The hon. Member is quite in order in discussing the Resolution, but he cannot now move an Amendment.

Mr. HAYDAY: I regret that very much. Perhaps I shall learn to render better service if I am permitted to remain in the House longer. I was not aware of the technicalities of order in this matter. I do not now know how my object can be achieved. If I moved the rejection of the Resolution, that would mean that the Ministry of Labour would not have power to pay such increased contributions as may become necessary to make up one-fourth of those paid by the other two contributing partners, who have had their contributions increased. I hesitate, therefore, to move the rejection of the Resolution, even if it were in order to do so, because I would rather have the powers which it is sought to place at the disposal of the Ministry than leave the Ministry with no power at all. I desire, however, to enter my protest against the inequality of the partnership as between the State, the employer, and the employé. The respective payments, namely, 7d. by the employé, 8d. by the employer, and only 3½d. by the State, do not represent the relative values that accrue from this scheme to the respective partners, which we consider to be one-third for each of them.

Dr. MACNAMARA: I should like to say a few words in reply to my hon. Friend, who has been very helpful in connection with the progress of the Bill in Committee. In recent Acts, the addition of one-fourth to the joint contributions of employers and employed has been the principle laid down, and I may tell my hon. Friend that that was the principle in the Act of 1911—though it was then one-third. Let me explain what these figures have meant. Under the Act of 1920, the contribution of one-fourth from the State, to be added to the joint contributions, worked out at 2d. per week in the case of men and 1⅔d. in the case of women. Under the Act of March last, which increased the contributions on both sides, the State had to pay 2¾d. in the case of men, and 2¼d. in the case of women. Under this Bill the joint contribution will be 1s. 3d. in the case of men, and 1s. 1d. in the case of women, and the State contribution will be 3¾d. in the case of men, and 3¼d. in the case of women. With regard to the aggregate figures, I will not go further back than the Act of 1920. In that case the State contribution in the aggregate was £4,250,000. Under the Act of the 3rd
March last, as the result of the increased contributions, the State's contribution was £5,750,000. As a result of the still further increase under this Bill, the State's contribution will be £7,750,000. That is a very considerable addition in a short period of time, consequent, of course, upon the increase in contributions. Now let me tell my hon. Friend where he stands. If this Resolution is passed, the State's contribution cannot be increased. Therefore, if my hon. Friend desires to reduce the employé's contribution, he must make up the difference from the employer. He cannot touch the State contribution. The alternative is to bankrupt the fund, and I am sure that my hon. Friend will be the last person to wish to do that.

Question put, and agreed to.

Resolved,
That for the purposes of any Act of the present Session relating to insurance against unemployment it is expedient—

(1) To authorise the payment, out of moneys provided by Parliament, of such an increased contribution towards unemployment benefit, and any other payments to be made out of the unemployment fund as will become payable if the rates of contributions to be made by employers and employed persons are raised in the case of men to one shilling and three pence and in the case of women to one shilling and one penny per week, but not exceeding one-quarter of the aggregate amount of such contributions received in any year;
(2) To authorise the Treasury to make, for the purpose of discharging the liabilities of the unemployment fund under the Unemployment Insurance Acts, 1920 and 1921, as amended by the said Act, advances out of the Consolidated Fund not exceeding at any time £20,000,000, and to borrow money for such advances by the issue of such securities as the Treasury think proper, the principal of, and interest on, any such securities to be charged on and payable out of the Consolidated Fund."

Resolution to be reported To-morrow.

FINANCE BILL.

Considered in Committee. [Progress, 20th June.]

[Mr. JAMES HOPE in the Chair.]

NEW CLAUSE.—(Deduction in respect of persons acting as housekeepers for widower or widow, or taking charge of widower's or widow's children.)

(1) If an individual proves that he is a widower, and that for the year of assess-
ment a person is resident with him in the capacity of housekeeper, or for the purpose of having the charge and care of any child of his, he shall, subject as hereinafter provided, be entitled to a deduction of two hundred and twenty-five pounds in respect of that person.

Provided that—

(a) No deduction shall be allowed under this Section unless the individual proves that no other individual is entitled to a deduction in respect of the same person under the provisions in Part II of the Finance Act, 1920, as amended by any subsequent enactment, or, if any other individual is so entitled, that the other individual has relinquished his claim thereto; and
(b) No deduction shall be allowed under this Section where the person is a married woman living with her husband, and the husband has claimed and been allowed a deduction of two hundred and twenty-five pounds under the provisions in Part II of the Finance Act, 1920, as amended by any subsequent enactment.

(2) In this Section the expressioin "child" means a child in respect of whom a deduction is allowed under Part II of the Finance Act, 1920, as amended by any subsequent enactment.

(3) This Section shall apply to an individual being a widow as it applies to an individual being a widower.

(4) Section nineteen of the Finance Act, 1920, is hereby repealed—[Mr. Spencer.]

Brought up, and read the First time.

Mr. SPENCER: I beg to move, "That the Clause be read a Second time."
The Bill as it reads now with regard to this point only gives a widower the advantage of the £225 abatement if he happens to have children under 16 years of age. The object of this Clause is to give a widower who has a housekeeper the same advantage in this respect as a married man. The operation of the Bill as it stands creates a very invidious distinction between taxpayer and taxpayer. You might have two married men living next to one another, the wife in the one case living, while in the other case the wife has died. The man whose wife has died may be engaging a housekeeper. If he happens to have a child under 16, then he is entitled to the £225 exemption, and in addition to that he has the relief for the child. As soon as the child passes the age of 16, he not only loses the abatement in respect of the child, but also a considerable part of the abatement in respect of the housekeeper whom he has engaged to look after his house. A man might easily have two or three children
whom he has put out to apprenticeship, and whose earnings are very small. His wife may be dead, and in those circumstances he might have to have a housekeeper. For the purposes of Income Tax, he is treated as a single man, and, although he has all the expenses of a home establishment, he is put in an entirely different category from the man who happens to be married and whose wife happens to be living. This is the cause of a great deal of dissatisfaction among those who are thus affected. It is to them a very invidious distinction, and the fact that taxation is falling so heavily upon the working classes as well as upon other sections of the community at the present time, is an additional reason why we should ask the Chancellor of the Exchequer to give very careful consideration to this Clause. I do not know to what extent, if passed, it will affect the Revenue of the country, but I think that the effect will be very slight indeed, and I am sure that the measure of satisfaction that it will give to those who are smarting under the present provision will far outweigh any disadvantage there may be as far as the Revenue is concerned. There is an additional reason why this concession should be made. The indirect taxation upon each family of five last year amounted to over 14s. per week. Where you have a man who has lost his wife, and he has got one or two children wham he may have to put out to apprenticeship, and he loses the abatement in respect of those children after they have passed 16 years of age, and then he loses the abatement in respect of his housekeeper, it makes a considerable difference so far as his contribution to the State is concerned, and I hope the Chancellor of the Exchequer will endeavour to meet us with regard to this new Clause.

Captain BOWYER: I beg to second the Motion.
I want to tell the Chancellor of the Exchequer of the very great interest that is being attached to this Clause in the working-class constituency which I represent. I was there on Saturday, and I interviewed a great many people, all of whom came to see me about the matter. What we claim is that if a man has been unfortunate enough to lose his wife, or a woman to lose her husband, and either has children or is compelled to keep a housekeeper, he or she should be treated
in exactly the same way as a married person and given the same deduction. It is futile to my mind to say to a man, "Because you have had the misfortune to lose your wife you shall not have any deduction except, possibly, the £45 which was allowed under Section 19 of the Finance Act, 1920." Only the other day a police magistrate in London took notice of what he called this grave injustice. It was a question of rent. He said:
All I can say is that it is very hard indeed. I have never looked at it in that light before. I am bound to make an order for payment of the amount due, but I shall allow a month in which to do it.
If a man loses his wife and has got to keep the house going, the very fact that he himself in future is compelled to provide a home and keep it up is a disadvantage to him. He cannot do it as economically as if he had a wife. As a married man gets the abatement of £225, my point is that I cannot see for the life of me why a person who has lost his or her partner in life, who, after all, helped to keep the house going, should be penalised and should not be treated on exactly the same footing.

Sir F. BANBURY: A married man may have more children, but a widower cannot.

Captain BOWYER: A married man may have more children, but, on the other hand, a man who has lost his wife may have more children. His own may have grown up, and he may have one or two children over 16 living with him. He may be some years over the normal period of 70 to which a man lives, and he has got to keep a housekeeper.

Sir F. BANBURY: That will not arise unless there are improper relations with the housekeeper.

Captain BOWYER: I was afraid, almost as much as I am shocked, that someone would make a remark bearing on that. It seems to me a thousand pities to bring in that sort of thing when, after all, this is a very just grievance. If you take any workshop or factory in the land you will find the greatest anomalies existing. Two men may be getting exactly the same amount of pay, £200 or £150 a year. One of them has a wife and no children and pays no Income Tax. The other has just had the disaster of losing his wife, and immediately has to pay anything up to £24 a year. Surely that cannot be justi-
fied. I should like to read a letter which puts the matter as clearly as it can be put:
I should like to draw your attention to the unjust Measures of the Government in the Finance Act of 1920 relating to the Income Tax provisions. I am a widower, and have a daughter who attained the age of 16 in February last, and who is doing her best to keep house for me. She is the only child I have, and I am prevented from allowing her to earn a livelihood owing to her having to be at home, and particularly I have to bear the expense of keeping her. As she attained the age of 16 previous to April last I am not entitled to the children deduction of £36, neither can I obtain the housekeeper's allowance of £45, because I have not a second child younger than her that she can look after. I am informed by the Income Tax authorities that if I had a younger child I should be able to obtain the children allowance and also the housekeeper's allowance for my daughter. As it is I am only granted the personal allowance of £135, and even were I to send my daughter to business and employ a housekeeper I should not benefit thereby. It seems to my mind most unfair that because a man has the misfortune to lose his wife he should be at once made to drop from the £225 to the £135 allowance, which means that he is brought back to bachelorhood only under very different circumstances.
Why treat a man as a bachelor when the circumstances of his life are totally different from those appertaining to a bachelor? Last November at the Mansion House the Prime Minister made a speech in which the following words occurred:
Believe me, if you want security in this country—and we must get it—you must give a sense of complete confidence to the workmen who constitute the vast majority of the people. This country means to deal fairly and squarely with them.
I have had scores of letters from my constituency, and they can be multiplied by the number of constituencies that exist, and I ask the right hon. Gentleman, Does he think this method of treating widows and widowers is dealing fairly and squarely with the people of this country?

Sir R. NEWMAN: Does the hon. and gallant Gentleman propose that the bachelors should have the same advantages—

The CHAIRMAN: This Clause relates to widowers only.

The CHANCELLOR of the EXCHEQUER (Sir Robert Home): I fear, from the character of the two speeches to which we have listened, that an attempt is going to be made, upon this and perhaps other Amendments, to cite hard
cases of people who are subjected to the burden of the Income Tax. There are very many hard cases. I do not believe it is possible to draw any Statute which will not give rise to hard cases. We are bound to have innumerable anomalies, no matter how well you construct your Income Tax system. A Royal Commission went into all these matters with very-great care, and only very recently reported, and the principles which they recommended have been adopted almost in toto by the Government. They were embodied in the Finance Act of last year, and they are precisely the same as we are endeavouring to enact once more this year. The system which was advanced by that Royal Commission was a very carefully considered system. It went into the whole matter upon the ground of general principle. It set up a very carefully graduated plan for the assessments of Income Tax, and it sought to make our Income Tax system one which would have strict regard to the capacity of people to pay, and would also take into consideration the character of their responsibilities. The system which it set forth and is now in operation is one of the best that could be conceived. Its effect may be judged from the fact that it let off the Income Tax payer something like £18,000,000, and while I have no doubt that you can still find hard cases, you have to look at what has been enacted as a general plan. If you begin to interfere with important elements in it, you are going to dislocate the whole system and set up not merely a change in the particular instance which we have now before us, but reactive changes throughout the whole plan devised by the Royal Commission. May I remind the Committee of one or two of the things they said? After recommending a particular arrangement which seemed to them to be wise, in the closing part of their report they expressed the opinion that:
A new line of graduation once fixed should not be liable to constant or partial alteration, but should remain unchanged in its main characteristics so long as the amount of revenue to be raised from Income Tax and Super-tax does not become very largely different from what it is now.
I would therefore beg the Committee, in considering the various Amendments which may be sought to be made, to keep that well in mind, because a change in any one of these particular arrangements undoubtedly will involve many changes
elsewhere. One is rather disappointed to hear the kind of expression which the hon. and gallant Member for Buckingham (Captain Bowyer) used—I am not sure whether it was his own or whether it was read from a letter—about the injustice which the Government had wrought by its Income Tax arrangements. This has been the greatest attempt yet made to remedy injustices, and also quite the most successful. But what, unfortunately, happens is that every change that you make which relieves the burden or grants a concession is only made a jumping-off ground for further demands. I hope the Committee is not going to look at this matter from that point of view. On the merits of this particular Amendment, let us look at what it does. The Clause which it seeks to amend allows the particular concession of £45 to a widower who has children. The Amendment seeks to do away with that condition. It seeks to apply equally to a widower who has no children.

Captain BOWYER: Children or a housekeeper.

Sir R. HORNE: I suppose the housekeeper under those circumstances would not be there in order to attend to any children, but simply to look after the needs of the widower himself.

Mr. SPENCER: The right hon. Gentleman must not misquote the Amendment. When he says children, it is children under 16. If a child is 16 and a day after the 1st April, he is not entitled to the £45.

Sir R. HORNE: I am afraid that my hon. Friend does not understand the point with which I am dealing. The question is whether you are going to give the same allowance to a widower who has no children, and, therefore, does not require a housekeeper to look after children, as you give to a widower who has children and requires a housekeeper to look after them. The situation of a single man—a widower without children is in that position—is totally different from that which excited the sympathy of the Royal Commission, whose recommendation is put into force by the Section which it is now sought to amend. The situation of a widower left with young children excites the sympathy of everybody. They are deprived of a mother, and have nobody to look after them, and he has to employ a housekeeper to look after
them. It was thought that such a man ought to have some concession in regard to the amount to which he was assessed for Income Tax. This Amendment seeks to give that concession to the widower who has no children and whose sole need for a housekeeper would be to look after him.

Mr. SWAN: Will the right hon. Gentleman pay attention to the children who are just turned 16?

Sir R. HORNE: I do not follow my hon. Friend.

Mr. SPENCER: A man gets £45 allowance because of his children, but as soon as his last child is 16 years of age he loses his £45, notwithstanding the fact that he has the children to look after, and he also loses £36 in respect of the child.

Sir R. HORNE: That might be a question of further amendment in connection with the allowance upon a particular child when it emerges from the age of 16; but I am not so much moved with the case of a widower who has children who have emerged from the age of 16. If they are boys they are already at work, and if they are girls they are certainly capable of looking after the house. How many girls under 16 do we know who are performing very useful vocations in looking after their father's house? Therefore, this Amendment is a quite unnecessary extension of what is a proper principle to lay down, namely, that a man with children should have consideration afforded to him when he has to employ somebody to look after them. The Royal Commission specifically said that no such allowance should be given to the widower who had no children to look after. Some years ago allowances were made in respect of widowers with children. Thereafter, the same allowance was continued for a widower without children, but the Royal Commission, having the whole facts before them, and having given consideration to them, came to the conclusion that this allowance should be done away with in the case of a widower with no children, and they so recommended. That recommendation was put into legal effect in the Finance Act of last year. I submit to the Committee that we should not depart from that perfectly salutary principle. It is all very well for hon. Members to say that they hope that nobody
will introduce an element into the Debate which seems to suggest that sometimes abuses are committed. There is no doubt that if you are going to give to every widower who has no children the right to a particular allowance in respect of a housekeeper, the situation will of necessity be open to abuse, and I have not the slightest doubt that in many cases it will be taken advantage of. This matter also would give rise to the question as to whether a bachelor is not just as much entitled to have an allowance made to him if he employs a housekeeper.

Mr. HODGE: He has not done his duty to King and country in getting married and rearing children.

Sir R. HORNE: It may be because he has been a failure, and that all his efforts to gain that delectable situation have so far not been a success. You may have other claims made on behalf of other people if you once admit this principle. It is said that it would not cost the Exchequed much. It would cost the Exchequer £1,500,000 to do what I submit is not a very necessary thing at the present time. I am not sure that the Amendment recognises that an unmarried person—a widower is an unmarried person—will be entitled to his personal allowance of £135, so that although he is put forward as only getting £45 as against £225 for a man in the married state, in reality he has £135, plus £45 for a housekeeper if he has children to be looked after, making in all £180 as against £225. There is no reason why at the present time, especially when money is so difficult to find, that we should sacrifice revenue by making a large contribution to a particular class of people who are not in such necessitous circumstances as to require it.

Mr. HODGE: I do not wish to go over the arguments put forward by my right hon. Friend, but I should like to refer to one point which he made with respect to a widower and the girl over 16 who looks after her father's house. There is such a great surplus of women over men that all women cannot be married, and if that girl is compelled to look after her father's house she has not an opportunity of learning a profession or an occupation, so that if she should happen to be in the unfortunate position of being one of those women who cannot find a husband, the difficulty of earning her living
afterwards are ever so much worse. That point of view ought to appeal to my right hon. Friend. So far as the question is raised about the widower being in the same position as the bachelor, I maintain that that is not the case. My right hon. Friend was rather courageous in endeavouring to draw a distinction, because he is one of those sinners who has not done his duty by his King and country. I hope that even yet he will reconsider his position, and reconsider it in both ways.

Viscountess ASTOR: Hear, hear!

Mr. HODGE: I find that the hon. Member for Plymouth agrees with me. I trust that even yet the Chancellor of the Exchequer will reconsider the attitude he has taken up, and really do something even if there should be some limit put upon the concession. In the case of a working man when his wife dies a very serious burden is placed upon him by the necessity of having to engage a housekeeper.

Mr. HOLMES: I want to emphasise the point which has been made by my right hon. Friend who has just spoken. I have a new Clause on the Paper embodying the suggestion that he has made—
If the claimant proves that he is a widower, and that a daughter over 16 years of age gives her full time to the duties of housekeeper, he shall, subject to the other provisions of Section nineteen, Sub-section (1), of the Finance Act, 1920, be entitled to a deduction of £90 in respect of that daughter.
That is, he should have an allowance as if he were a married man with a wife. The Chancellor of the Exchequer has named three reasons why he cannot accept the full Amendment which has been moved. The first reason was that it was contrary to the recommendations of the Royal Commission. The second was that it would cause an increase of immorality in the nation—that is what he meant—and the third reason was that it would cost over £1,000,000.

Sir R. HORNE: The hon. Member must have misunderstood me. The second point which he mentions, as to abuse, was not really put forward as one of the main arguments which I was addressing to the Committee. I only indicated it in reply to my hon. and gallant Friend
behind me (Captain Bowyer), and I said that that consideration was not entirely to be neglected. I did not put it higher than that.

Mr. HOLMES: I do not want to put it any more strongly than the right hon. Gentleman did, but it was one of the arguments he used against accepting the Amendment. I submit that if he will limit the allowance to a daughter over 16 years of age who acts as her father's housekeeper, he will do away with these three objections. There can be no question of abuse such as he has described and it is not contrary to the recommendations of the Royal Commission, because that particular point did not occur to the Royal Commission, was not submitted to them, and has not been in any way considered by them. Finally, the charge would be very much lower than £1,500,000 which he suggested would be the charge if the housekeepers were to be treated as in the nature of wives. There is a considerable feeling of injustice amongst men who lose their wives and bring a daughter away from work, where she is earning her living, and contributing to the home, if his allowance is forthwith reduced from £225 to £135. He gets nothing for the daughter because she is over 16 years of age, he loses her contribution to the home, and his allowance is reduced by £90. While one can recognise some of the reasons which the Chancellor of the Exchequer has put forward against accepting the full Amendment, I do hope that in the case I have mentioned it is not a very serious matter so far as the State is concerned, and that it will make the payment of income tax by the workers a little less hard upon them where the daughter has succeeded her mother as housekeeper if she is allowed to be treated in respect of allowance as if she were the wife.

Mr. T. THOMSON: I should like to join in the appeal in regard to a case which is known to a great many of us, and in respect of which very much hardship is felt. The Chancellor of the Exchequer made considerable point of the difference between a man who had children under 16 and the man who had not. The allowance that is made to a married man for his wife is, in the first instance, for his wife as housekeeper, and the question of children under 16 is met by a further
provision which makes the allowance for the children as children. Therefore, the man who has lost his wife is under a double sense of hardship because he not only suffers hardship on account of the loss of his wife as housekeeper, but he also loses the allowance for his children-who are over 16. The hardship is not on the working classes alone, but it is to a large extent on the whole community. It is not confined merely to the manual workers, but there is a very large section of the community, the heavily-taxed middle classes, who would benefit considerably if this sense of hardship and injustice was removed. I hope that the-Chancellor of the Exchequer in the larger interests of many people will see his way to accept the Amendment suggested by my hon. Friend (Mr. Holmes).

Mr. WATERSON: May I urge the point that the daughter over 16 who is in charge-of a home for the father should qualify for the same allowance as the father would be allowed if his wife were alive. The Chancellor of the Exchequer did not say exactly that the daughter who attains, that age would be compelled—but that was the inference—to take charge of the home. But there may be hardships there. I have in my mind a family in which there are three daughters. Two of them are training for teachers. Another is training to be specially qualified as a chemist. Assuming for a moment that any one of those daughters would be compelled, in order to get an abatement of Income Tax for the father, to take up various home-duties that an ordinary person would be able to perform; if you force such conditions on our people as I have referred torn the long run the State will be the loser, because these people have certain capabilities which are far above the ordinary. My right hon. Friend mentioned the word "abuse." There is no law which is not in some way open to abuse. Therefore I do not think that the Committee should take much notice of what the Chancellor of the Exchequer has said in that connection. He has said that it would be most unwise to make a change now, but when would it be wise? All the Chancellors of the Exchequer before him have put the same arguments before the Committee. We are bound to bring this forward from time to time because we believe that an injustice is inflicted on the people, and
that neither the Chancellor nor the State will in the long run benefit by refusing to give relief to those people.

Viscountess ASTOR: May I in a few words ask the Chancellor to consider seriously this Amendment so far as concerns girls over 16. All the girls in these days if over 16 look for a job. The hon. Gentleman referred to those unfortunate women who are not able to marry, but I am talking about those fortunate ones who can marry and get a job as well, the girls who go out to work and then go home to look after their fathers. This slight abatement will help these girls to come home because their fathers can give them more advantages than anyone else. Then, so far as the men are concerned, you are driving these widowers in a great many cases into hasty marriages which are not good for the nation. I will not dwell on the subject of bachelors who will not marry. That is personal, but it is true, and I know cases that widowers have been driven into hasty marriages which are bad for them and bad for the State, and it is bad for the children who have to be looked after when those fathers are driven into hasty marriages. It would be far better for the country if the right hon. Gentleman could accept this Amendment, if it does not cost too much, and thus get rid of a great sense of grievance, not only among working men but among men of the middle class who have to have their daughters back to look after the home.

Brigadier-General HICKMAN: The right hon. Gentleman must not think that, because all the speeches so far have gone one way, the entire Committee is in favour of this particular Clause. Very many of us take the view that the right hon. Gentleman should stick to the Finance Bill, as it is at present worded, and not give way to those who are trying to put a housekeeper on equal terms with a wife.

Sir W. JOYNSON-HICKS: I was just about to make the same point as the hon. and gallant Gentleman. I never heard of any man being driven into a hasty marriage because he was going to get an allowance of 6s. in the pound on £40. There may be a time for this concession to be made, but that time is certainly not in the present financial condition of the country. Those of us
who are paying service outside the House to the cause of economy must support the Government. To give an allowance of this character, which would cost £1,000,000 a year, would be in effect imposing a further taxation of £1,000,000 a year. Though we have not taken part in these Debates a vast number of Members of the House strongly support the Government in this matter, and I ask the right hon. Gentleman to remain firm.

Mr. W. GRAHAM: I am not sure that I should have intervened but for a reference which the Chancellor of the Exchequer made to the Report of the Royal Commission on Income Tax. I am sure the right hon. Gentleman wishes to be strictly fair to the Royal Commission in this matter, but remember the circumstances in which the Royal Commission prepared its report and consider the particular proposal that the Committee is now discussing. That Report had to be completed by a certain date in order that its recommendations could be embodied in the Budget of that year, and when the question of the housekeeper's allowance was under consideration, I think that it is correct to say that it was practically passed over without any recommendation of any kind, because it had been within a very recent time the subject of inquiry by some Departmental or other Committee. That is the beginning and end of the story as regards the Royal Commission on this matter.
There are certain members of the Royal Commission who feel very strongly that, while we have introduced great improvements in the structure of the Income Tax in this country, the position of the widower is undoubtedly one of substantial hardship at the present time. Take the obstacles which the widower has to overcome before he gets this allowance. In the first place he has got to prove a female relative of his own or his deceased wife for the purpose of looking after a child. Beyond that, if he has no female relative for that purpose and must engage a housekeeper he has got to prove it. A great hardship in working-class and other districts is the fact of making the allowance conditional upon there being a child under 16 years of age to look after. I recognise that it is in some respects a strong request to ask for an allowance of £225, placing a widower
with a housekeeper substantially in the position of a married man without children, and of course an allowance for children if there should be any children eligible for it; but it is wrong to found very strongly on the Report of the Royal Commission on this matter, because this particular subject was not considered in any detail. If the right hon. Gentleman cannot go all the way in the matter I would ask him whether, between now and Report stage, he would be prepared to consider some modification of the position, because there are hard cases of widowers who are penalised by the absence of a little more generous provision at the present time.

Mr. SWAN: I hope the Chancellor will give some further concession on this matter. We who live among the people know that even since concessions were given to husbands for their wives many substantial injustices are still left. I am sure that the Chancellor of the Exchequer would not like to be unjust to anyone if it could be avoided. I know a case now in which for a considerable time the husband was placed in the unfortunate position, after losing his wife, that he had to take his daughter away from what had been a decent lucrative occupation and he has got no allowance there, though he had an invalid son whom he had to maintain. Surely the Chancellor of the Exchequer is able to see the unfairness to that particular individual. If this Amendment is carried I think that it would in substantial measure remove that injustice. So far as that injustice exists it ought to be the duty of this Committee to try to remove it and place the whole of the citizens on something like an equal plane. Until we do that, to people of that description the only alternative would be for the widower to break up his home and that would not be good for the citizen or his invalid son or daughter. They would have to go to lodgings and the nation would become poorer. I hope the Chancellor, in common fairness to these people, will try to spring a point. So far as many of the working people are concerned now there will not be the measure of benefit now that there would have been 12 months' ago, in view of their present wages, but whether the wages reach that stage, where such a man would have an allowance comparable with that of the ordinary husband with a family of £225
for his wife, or not, that concession ought to be given. I hope that the right hon. Gentleman will raise the allowance to what the man would have if he were married.

Mr. HOLMES: May I move an Amendment on a new Clause?

The CHAIRMAN: The Motion before the Chair is "That the Clause be read a Second time." If the Clause be read a Second time, an Amendment would then be in order, but at present an Amendment would not be in order.

7.0 P.M.

Mr. HOLMES: Might I ask, in the event of this Clause not being read a second time, whether you would allow us to take a vote, later on, upon a new Clause which I have on the Paper limiting the concession to a daughter over 16 years of age?

The CHAIRMAN: No; I am afraid that would not be possible. At present the question is whether any concession should be made, and when the Question is put that the Clause be read a second time, if that is decided in the negative, then the Committee will have decided that no such concession should be made.

Mr. HOLMES: I would submit that the Clause now before the Committee is giving a concession to any housekeeper, whether a relative or not, or a friend. The Clause which I have put down is far more limited in scope. It is merely giving an allowance in respect of a daughter over 16 years of age who acts as housekeeper to her father. If the Committee refuses to give a Second Reading to the Clause now before it, it will be saying that it will not give an allowance to a housekeeper, whoever she may be, but it will not thereby be saying that it would do the same for a daughter alone

The CHAIRMAN: The logical course for the hon. Member to pursue, if I might advise him, is to vote for the Second Reading of this Clause, and to move his limiting Amendment to it afterwards. The present question is whether there shall be any concession. If that be carried, it will afterwards be open to the hon. Member to define what the concession shall be.

Question put, "That the Clause be read a Second time."

The Committee divided: Ayes, 66; Noes, 220.

Division No. 182.]
AYES.
[7.4 p.m.


Barker, G. (Monmouth, Abertillery)
Hartshorn, Vernon
Rees, Capt. J. Tudor- (Barnstaple)


Barnes, Major H. (Newcastle, E.)
Hayday, Arthur
Rendall, Athelstan


Benn, Captain Wedgwood (Leith)
Hayward, Evan
Richardson, R. (Houghton-le-Spring)


Bowerman, Rt. Hon. Charles W.
Hinds, John
Robertson, John


Bowyer, Captain G. W. E.
Hodge, Rt. Hon. John
Royce, William Stapleton


Bramsdon, Sir Thomas
Hogge, James Myles
Shaw, Hon. Alex. (Kilmarnock)


Briant, Frank
Holmes, J. Stanley
Spencer, George A.


Bromfield, William
Irving, Dan
Swan, J. E.


Brown, James (Ayr and Bute)
Johnstone, Joseph
Thomson, T. (Middlesbrough, West)


Bruton, Sir James
Kenworthy, Lieut.-Commander J. M.
Thorne, G. R. (Wolverhampton, E.)


Cairns, John
Kenyon, Barnet
Waddington, R.


Cape, Thomas
Kidd, James
Wallace, J.


Carter, W. (Nottingham, Mansfield)
Law, Alfred J. (Rochdale)
Waterson, A. E.


Cowan, D. M. (Scottish Universities)
Lawson, John James
Wedgwood, Colonel Josiah C.


Davies, A. (Lancaster, Clitheroe)
Maclean, Rt. Hn. Sir D. (Midlothian)
White, Charles F. (Derby, Western)


Davies, Thomas (Cirencester)
MacVeagh, Jeremiah
Williams, Aneurin (Durham, Consett)


Galbraith, Samuel
Maitland, Sir Arthur D. Steel-
Williams, Col. P. (Middlesbrough, E.)


Gilbert, James Daniel
Morgan, Major D. Watts
Wilson, Rt. Hon. J. W. (Stourbridge)


Graham, R. (Nelson and Coine)
Murray, Dr. D. (Inverness & Ross)
Wintringham, Thomas


Graham, W. (Edinburgh, Central)
Newbould, Alfred Ernest
Wood, Major M. M. (Aberdeen, C.)


Grundy, T. W.
O'Grady, James



Guest, J. (York, W. R., Hemsworth)
Rae, H. Norman
TELLERS FOR THE AYES.—


Hallas, Eldred
Raffan, Peter Wilson
Mr. Myers and Mr. Frederick Hall.


NOES.


Addison, Rt. Hon. Dr. Christopher
Edwards, Hugh (Glam., Neath)
Jones, Sir Edgar R. (Merthyr Tydvil)


Adkins, Sir W. Ryland D.
Elliott, Lt.-Col. Sir G. (Islington, W.)
Jones, Sir Evan (Pembroke)


Agg-Gardner, Sir James Tynte
Evans, Ernest
Jones, Henry Haydn (Merioneth)


Amery, Leopold C. M. S.
Fade, Major Sir Bertram Godfray
Joynson-Hicks, Sir William


Bagley, Captain E. Ashton
Fell, Sir Arthur
Kellaway, Rt. Hon. Fredk. George


Baird, Sir John Lawrence
Flannery, Sir James Fortescue
King, Captain Henry Douglas


Baldwin, Rt. Hon. Stanley
Ford, Patrick Johnston
Knights, Capt. H. N. (C'berwell, N.)


Balfour, Rt. Hon. A. J. (City of Lon.)
Foreman, Sir Henry
Lambert, Rt. Hon. George


Balfour, George (Hampstead)
Forestier-Walker, L.
Lane-Fox, G. R.


Banbury, Rt. Hon. Sir Frederick G.
Foxcroft, Captain Charles Talbot
Lewis, Rt. Hon. J. H. (Univ., Wales)


Barlow, Sir Montague
Ganzoni, Sir John
Lindsay, William Arthur


Barnett, Major Richard W.
Gardiner, James
Lister, Sir R. Ashton


Barnston, Major Harry
Gardner, Ernest
Lloyd, George Butler


Beckett, Hon. Gervase
Gee, Captain Robert
Lloyd-Greame, Sir P.


Bell, Lieut.-Col. W. C. H. (Devizes)
George, Rt. Hon. David Lloyd
Locker-Lampson, Com. O. (H'tingd'n)


Bellairs, Commander Carlyon W.
Gibbs, Colonel George Abraham
Lorden, John William


Birchall, Major J. Dearman
Gilmour, Lieut.-Colonel Sir John
Loseby, Captain C. E.


Bird, Sir A. (Wolverhampton, West)
Glanville, Harold James
Lowe, Sir Francis William


Bird, Sir William B. M. (Chichester)
Grant, James Augustus
Mackinder, Sir H. J. (Camlachie)


Boscawen, Rt. Hon. Sir A. Griffith-
Green, Joseph F. (Leicester, W.)
McLaren, Robert (Lanark, Northern)


Boyd-Carpenter, Major A.
Greene, Lt.-Col. Sir W. (Hack'y, N.)
M'Lean, Lieut.-Col. Charles W. W.


Bridgeman, Rt. Hon. William Clive
Gregory, Holman
Macleod, J. Mackintosh


Briggs, Harold
Greig, Colonel Sir James William
McMicking, Major Gilbert


Brown, Major D. C.
Gretton, Colonel John
Macnamara, Rt. Hon. Dr. T. J.


Buckley, Lieut.-Colonel A.
Gritten, W. G. Howard
Macpherson, Rt. Hon. James I.


Burn, Col. C. R. (Devon, Torquay)
Guinness, Lieut.-Col. Hon. W. E.
Maddocks, Henry


Carr, W. Theodore
Hacking, Captain Douglas H.
Manville, Edward


Carter, R. A. D. (Man., Withington)
Hamilton, Major C. G. C.
Martin, A. E.


Cautley, Henry Strother
Hannon, Patrick Joseph Henry
Meysey-Thompson, Lieut.-Col. E. C.


Cecil, Rt. Hon. Lord H. (Ox. Univ.)
Harmsworth, C. B. (Bedford, Luton)
Middlebrook, Sir William


Chamberlain, Rt. Hn. J. A. (Birm. W.)
Harris, Sir Henry Percy
Molson, Major John Elsdale


Chamberlain, N. (Birm., Ladywood)
Haslam, Lewis
Mond, Rt. Hon. Sir Alfred Moritz


Cheyne, Sir William Watson
Henderson, Major V. L. (Tradeston)
Montagu, Rt. Hon. E. S.


Churchill, Rt. Hon. Winston S.
Henry, Denis S. (Londonderry, S.)
Moore, Major-General Sir Newton J


Churchman, Sir Arthur
Hickman, Brig.-General Thomas E.
Morrison, Hugh


Clay, Lieut.-Colonel H. H. Spender
Hills, Major John Waller
Morrison-Bell, Major A. C.


Clough, Robert
Hoare, Lieut.-Colonel Sir S. J. G.
Munro, Rt. Hon. Robert


Coats, Sir Stuart
Hohler, Gerald Fitzroy
Murray, Hon. A. C. (Aberdeen)


Colfox, Major Wm. Phillips
Holbrook, Sir Arthur Richard
Neal, Arthur


Colvin, Brig.-General Richard Beale
Hood, Joseph
Newman, Colonel J. R. P. (Finchley)


Conway, Sir W. Martin
Hope, Sir H. (Stirling & Cl'ckm'nn,W.)
Newman, Sir R. H. S. D. L. (Exeter)


Cope, Major William
Hope, Lt.-Col. Sir J. A. (Midlothian)
Nicholson, Reginald (Doncaster)


Cory, Sir J. H. (Cardiff, South)
Hope, J. D. (Berwick & Haddington)
Nicholson, William G. (Petersfield)


Croft, Lieut.-Colonel Henry Page
Hopkins, John W. W.
Norton-Griffiths, Lieut.-Col. Sir John


Davies, Alfred Thomas (Lincoln)
Hopkinson, A. (Lancaster, Mossley)
Ormsby-Gore, Hon. William


Davies, Sir William H. (Bristol, S.)
Horne, Sir R. S. (Glasgow, Hillhead)
Parker, James


Davison, J. E. (Smethwick)
Hunter, General Sir A. (Lancaster)
Pearce, Sir William


Dawes, James Arthur
Hurd, Percy A.
Peel, Col. Hn. S. (Uxbridge, Mddx.)


Denniss, Edmund R. B. (Oldham)
Hurst, Lieut.-Colonel Gerald B.
Percy, Charles (Tynemouth)


Dockrell, Sir Maurice
James. Lieut.-Colonel Hon. Cuthbert
Perkins, Walter Frank


Doyle, N. Grattan
Jameson, John Gordon
Perring, William George


Du Pre, Colonel William Baring
Jephcott, A. R.
Pilditch, Sir Philip


Edwards, Major J. (Aberavon)
Jesson, C.
Pinkham, Lieut.-Colonel Charles


Pollock, Sir Ernest Murray
Sprot, Colonel Sir Alexander
Wheler, Col. Granville C. H.


Pownall, Lieut.-Colonel Assheton
Stanier, Captain Sir Beville
White, Col. G. D. (Southport)


Pratt, John William
Stanley, Major Hon. G. (Preston)
Williams, C. (Tavistock)


Pretyman, Rt. Hon. Ernest G.
Starkey, Captain John Ralph
Williams, Col. Sir R. (Dorset, W.)


Purchase, H. G.
Steel, Major S. Strang
Wills, Lt.-Col. Sir Gilbert Alan H.


Randles, Sir John Scurrah
Sturrock, J. Leng
Wilson, Lt.-Col. Sir M.(Bethnal Gn.)


Rees, Sir J. O. (Nottingham, East)
Sugden, W. H.
Winterton, Earl


Remer, J. R.
Surtees, Brigadier-General H. C.
Wise, Frederick


Richardson, Alexander (Gravesend)
Sutherland, Sir William
Wood, Hon. Edward F. L. (Ripon)


Roberts, Samuel (Hereford, Hereford)
Taylor, J.
Wood, Sir J. (Stalybridge & Hyde)


Robinson, S. (Brecon and Radnor)
Terrell, George (Wilts, Chippenham)
Wood, Major S. Hill- (High Peak)


Rodger, A. K.
Thomas, Sir Robert J. (Wrexham)
Woolcock, William James U.


Roundell, Colonel R. F.
Thomas-Stanford, Charles
Worthington-Evans, Rt. Hon. Sir L.


Samuel, A. M. (Surrey, Farnham)
Thomson, F. C. (Aberdeen, South)
Yate, Colonel Sir Charles Edward


Sanders, Colonel Sir Robert Arthur
Thomson, Sir W. Mitchell- (Maryhill)
Yeo, Sir Alfred William


Sassoon, Sir Philip Albert Gustave D.
Thorpe, Captain John Henry
Young, E. H. (Norwich)


Scott, Leslie (Liverpool, Exchange)
Tickler, Thomas George
Young, Sir Frederick W. (Swindon)


Seager, Sir William
Townley, Maximilian G.



Seddon, J. A.
Turton, Edmund Russborough
TELLERS FOR THE NOES.—


Shaw, Capt. William T. (Forfar)
Walters. Rt. Hon. Sir John Tudor
Colonel Leslie Wilson and Mr.


Smith, Sir Harold (Warrington)
Ward-Jackson, Major C. L.
Dudley Ward.


Smith, Sir Malcolm (Orkney)
Watson, Captain John Bertrand

NEW CLAUSE.—(Amendment of 10 and 11 Geo. V., c. 18, s. 20.)

Section twenty of the Finance Act, 1920 (which provides for a deduction from assessable income in respect of a widowed mother, etc.), shall have effect as if for the words "forty-five pounds" there were substituted the words "seventy-five pounds."—[Major Watts Morgan.]

Brought up, and read the First time.

Major WATTS MORGAN: I beg to move, "That the Clause be read a Second time."
The Clause refers to Section 20 of the Finance Act, 1920, which provides for a deduction from assessable income in respect of a widowed mother, and so on. I do not propose to take up the time of the Committee by reading the Section. I think it is quite familiar to the Chancellor of the Exchequer and to hon. Members. It deals with the unmarried claimant who has living with him, either his mother being a widow or a person living apart from her husband, or some other female relative. I have followed very closely and with some interest the remarks made by the Chancellor of the Exchequer in regard to the previous new Clause moved by hon. Members on this Bench. The right hon. Gentleman said that we were living at a time when there ought to be no interference with all the possible money that can be raised from every source, and especially from the Income Tax. I also heard with some interest the assurance given by hon. Members below the Gangway that they were supporting the Chancellor of the Exchequer in this direction. All of us are aware that the burdens of the Budget are enormously heavy, and some of us are aware that there are different opinions with regard to the methods which are adopted as, for instance, in regard to the
contributions towards reduction of debt. However that may be, I do not think that any of the remarks offered by the Chancellor of the Exchequer in opposition to that Clause can be directed against the Clause I am now moving. I say that because I do not propose to cite any hard cases at all. The application of the Clause will be general, and I contend that at present, under the operation of the Finance Act of 1920, the burden does not fall equally upon all the persons assessed for Income Tax.
I ask the Chancellor of the Exchequer, or the Financial Secretary to the Treasury who, like his chief, is a bachelor, to say that as far as an unmarried person living with his widowed mother or his sister is concerned, and where there are children below a certain age, the rebate or relief given now is unequal and unjust. Such a person gets a relief or deduction of £45. My proposal is to increase the amount to £75. No one can say that there is the slightest difference in the cost of maintaining a family where a man is living with his wife and two children, and the cost in the case of a young unmarried man who has got a widowed mother and two young children or a sister and two children to maintain. To their credit be it said, there are hundreds of the working classes who have denied themselves in years gone by and have maintained homes of that description. Surely we ought to encourage that as a benefit to the State, as tending to the making of good citizens, and as encouraging a higher standard of honour and chivalry amongst our young people. What better assets can you have than the raising of the standard of honour in that way? I do not know whether my proposal would mean a severe or a small
loss in Income Tax, but I hope hon. Members who understand the situation will support this rectification of an injustice. When young men deny themselves many pleasures and take upon their shoulders many burdens which the State might otherwise be called upon to bear they ought to be encouraged.

Mr. W. CARTER: I beg to second the Motion.
I hope the case which has been put will appeal to the Chancellor of the Exchequer. The arguments my hon. Friend has adduced are incontestible, and any hon. Member who wishes to treat the case fairly and honestly will give his vote in favour of the new Clause. When the breadwinner has gone and the son assumes the responsibility of financing the home and supporting his widowed mother and sisters, he should have every possible consideration. Last year, from this side of the House, a Resolution was moved which provided that where a son assumed the responsibility of supporting a home for a widowed mother, he should be placed in the same category as a married man, and have an allowance of £225 free from Income Tax. That was a reasonable proposition. We are not asking as much in this proposal. We all know what expense would be thrown on such a young man. As people get older they require special nourishment, more particularly if they are sick, and the cost is infinitely higher to-day than in the days before the War. When a son has the courage and the manliness to step into the breach when his father is dead, we ought to give him every encouragement. Previously we were told that the finances of the country would not stand it. I hope that plea will not be made now.

Mr. W. GRAHAM: My only purpose in intervening is to draw attention to the fact that this Amendment is distinct from a later proposal on the Paper which refers to dependent relatives. Before the Financial Secretary replies I wish to direct his attention to a very important proviso to this grant of £45. It is given only to an unmarried person who has to maintain a widowed mother or a mother who is living apart from her husband or some other female relative for the purpose of having charge or care of any brother or sister in respect of whom the deduction for children is given.

The FINANCIAL SECRETARY to the TREASURY (Mr. Hilton Young): The last speaker has drawn a useful and an entirely accurate distinction, and I am not sure it was present in the mind of the hon. Member who seconded the Motion. It seemed to me, in listening to him, that he was basing his arguments to some extent in respect of conditions more native to dependent relatives. This Amendment deals with the case of the unmarried man whose widowed mother or other female relative is living with him for the express purpose of looking after his brothers or sisters. I am sure the Committee will agree that those are circumstances which have a special claim on our sympathy. Nevertheless I have to point out that we are dealing here with a case which is capable of comparison by strict analogy with that case upon which the Committee has just made its decision. The last case discussed was the case of the widower with a female relative or some person looking after his young children. Here also we have a household which has to provide a new family head. The circumstances are the same, and of course—

Major MORGAN: It is not a new family head; it is a new head of the family who adopts responsibility.

Mr. YOUNG: A substituted one. The circumstances are the same, and I submit that the financial concessions allowed should be the same also. In the last case which the Committee decided the concession was maintained at £45, and it would certainly appear to be illogical to make a breach in the general outline of the scheme of allowances by making a different allowance in this case. Stress has been laid upon the difference between the allowance of £225 made in the case of a married couple and that of £180 in the case under consideration. The Committee will remember that that is a difference which had been decided upon as a matter of principle. The Royal Commission recommended that this distinction should be made in favour of the married couple. That was very deliberately and, I believe, quite advisedly accepted by the House when it first established these schemes of personal allowances, and it would be an abrupt and disproportionate breach in the conditions of these allowances to depart from that principle here. Admittedly, this is not a matter of the same magnitude as that raised in the last
case, and the Committee will not require me to repeat what has already been stated as regards the maintenance of the general scheme of these allowances.

Mr. HAYWARD: I am extremely sorry that the Financial Secretary to the Treasury finds himself unable to accept this Amendment. The principal ground for his refusal seems to be that this case is analogous with the case dealt with under the previous Amendment, and therefore the same principle should apply. I am not quite so sure that the cases are quite analogous. The previous case was that of a widower who had young children, and who brought in a relative of the family for the purpose of looking after the young children. In such a case there is a legal obligation upon the father to maintain and provide for the children, but in the case contemplated by the present Amendment there is no such legal obligation. It is the case of an unmarried man undertaking the maintenance and the care of children and a mother for whom he has no legal liability. When it comes to considering the justice of the case, we should remember that if the unmarried person did not fulfil this obligation, for which he is not liable legally, the obligation would then rest upon the State or upon the particular locality in some form or other. This is an even stronger case than the preceding one. It is obvious that a person undertaking to discharge an obligation of this kind voluntarily should have more consideration extended to him than is afforded by the present proposal in the Bill.

Mr. LAWSON: It seems to me to be scarcely right that the State should

benefit as the result of a domestic bereavement. That is what the Amendment aims at remedying. Its object is to deal with the case of a family who lose the head and consequently lose the income which the head of the family formerly brought into the home. The eldest son then takes the responsibilities of the father upon himself, and he then discovers that in addition to losing the income of the head, the family is also penalised in respect of the amount which was formerly allowed on the income of the father. The State is thus benefiting in so far as the young man carries on the home, while a lesser amount is deducted from the taxable income of the family. The amount allowed to the boy in his new capacity as head of the family is not as much as was allowed to the father during the latter's lifetime, while at the same time he has to devote all his wages to the family. This is a very moderate Amendment. Last year we moved an Amendment which would have placed the son in exactly the same position as the father, and more consideration might be given to the moderate proposal now put forward than the Government seem to be extending to it. I know their policy has been to put up a stiff back against all Amendments, but this is a case for some consideration, more especially having regard to the point made by the hon. Member who spoke last, showing that if the boy did not accept the responsibilities for the home it would entail a financial burden on the State.

Question put, "That the Clause be now read a Second time."

The Committee divided: Ayes, 66; Noes, 202.

Division No. 183.]
AYES.
7.36 p.m.


Acland, Rt. Hon. Francis D.
Graham, R. (Nelson and Colne)
Moore, Major-General Sir Newton J.


Bagley, Captain E. Ashton
Graham, W. (Edinburgh, Central)
Murray, Dr. D. (Inverness & Ross)


Barker, G. (Monmouth, Abertillery)
Gritten, W. G. Howard
Myers, Thomas


Barnes, Rt. Hon. G. (Glas., Gorbals)
Grundy, T. W.
Newbould, Alfred Ernest


Barnes, Major H. (Newcastle, E.)
Guest, J. (York, W. R., Hemsworth)
O'Connor, Thomas P.


Bowerman, Rt. Hon. Charles W.
Hallas, Eldred
O'Grady, James


Bramsdon, Sir Thomas
Hartshorn, Vernon
Peel, Col. Hon. S. (Uxbridge, Mddx.)


Bromfield, William
Hayday, Arthur
Raffan, Peter Wilson


Brown, James (Ayr and Bute)
Hayward, Evan
Rees, Capt. J. Tudor (Barnstaple)


Cairns, John
Hinds, John
Richardson, Alexander (Gravesend)


Cape, Thomas
Hodge, Rt. Hon. John
Richardson, R. (Houghton-le-Spring)


Carter, W. (Nottingham, Mansfield)
Hogge, James Myles
Robertson, John


Cowan, D. M. (Scottish Universities)
Holmes, J. Stanley
Royce, William Stapleton


Davies, A (Lancaster, Clitheroe)
Irving, Dan
Seddon, J. A.


Davies, Alfred Thomas (Lincoln)
Johnstone, Joseph
Shaw, Hon. Alex. (Kilmarnock)


Edwards, Major J. (Aberavon)
Jones, G. W. H. (Stoke Newington)
Spencer, George A.


Edwards, Hugh (Glam., Neath)
Kenworthy, Lieut.-Commander J. M.
Swan, J. E.


Foxcroft, Captain Charles Talbot
Kenyon, Barnet
Taylor, J.


Galbraith, Samuel
Lawson, John James
Thomson, T. (Middlesbrough, West)


Glanville, Harold James
MacVeagh, Jeremiah
Thorne, G. R. (Wolverhampton, E.)


Waterson, A. E.
Williams, Col. P. (Middlesbrough, E.)
TELLERS FOR THE AYES.—


White, Charles F. (Derby, Western)
Wilson, Rt. Hon. J. W. (Stourbridge)
Major Watts Morgan and Mr.


Williams, Aneurin (Durham, Consett)
Wood, Major M. M. (Aberdeen, C.)
Frederick Hall.


NOES.


Addison, Rt. Hon. Dr. Christopher
George, Rt. Hon. David Lloyd
Norman, Major Rt. Hon. Sir Henry


Adkins, Sir W. Ryland D.
Gibbs, Colonel George Abraham
Ormsby-Gore, Hon. William


Agg-Gardner, Sir James Tynte
Gilbert, James Daniel
Parker, James


Amery, Leopold C. M. S.
Gilmour, Lieut.-Colonel Sir John
Pearce, Sir William


Ashley, Colonel Wilfrid W.
Gould, James C.
Perkins, Walter Frank


Atkey, A. R.
Goulding, Rt. Hon. Sir Edward A.
Perring, William George


Baird, Sir John Lawrence
Green, Joseph F. (Leicester, W.)
Pilditch, Sir Philip


Baldwin, Rt. Hon. Stanley
Greene, Lt.-Col. Sir W. (Hack'y, N.)
Pinkham, Lieut.-Colonel Charles


Balfour, Rt. Hon. A. J. (City of Lon.)
Gregory, Holman
Pollock, Sir Ernest Murray


Balfour, George (Hampstead)
Greig, Colonel Sir James William
Pownall, Lieut.-Colonel Assheton


Barlow, Sir Montague
Gretton, Colonel John
Pratt, John William


Barnett, Major Richard W.
Guinness, Lieut.-Col. Hon. W. E.
Pretyman, Rt. Hon. Ernest G.


Barnston, Major Harry
Hacking, Captain Douglas H.
Purchase, H. G.


Beckett, Hon. Gervase
Hailwood, Augustine
Rae, H. Norman


Bell, Lieut.-Col. W. C. H. (Devizes)
Hamilton, Major C. G. C.
Randles, Sir John Scurrah


Bellairs, Commander Carlyon W.
Hannon, Patrick Joseph Henry
Rankin, Captain James Stuart


Benn, Sir A. S. (Plymouth, Drake)
Haslam, Lewis
Remer, J. R.


Birchall, Major J. Dearman
Henderson, Major V. L. (Tradeston)
Remnant, Sir James


Bird, Sir A. (Wolverhampton, West)
Hennessy, Major J. R. G.
Roberts, Samuel (Hereford, Hereford)


Bird, Sir William B. M. (Chichester)
Henry, Denis S. (Londonderry, S.)
Robinson, S. (Brecon and Radnor)


Boscawen, Rt. Hon. Sir A. Griffith-
Hewart, Rt. Hon. Sir Gordon
Rodger, A. K.


Boyd-Carpenter, Major A.
Hickman, Brig.-General Thomas E.
Roundell, Colonel R. F.


Bridgeman, Rt. Hon. William Clive
Hohier, Gerald Fitzroy
Samuel, A. M. (Surrey, Farnham)


Briggs, Harold
Hood, Joseph
Samuel, Samuel (W'dsworth, Putney)


Broad, Thomas Tucker
Hope, Sir H. (Stirling & Cl'ckm'nn'n,W.)
Sanders, Colonel Sir Robert Arthur


Brown, Major D. C.
Hope, Lt.-Col. Sir J. A. (Midlothian)
Sassoon, Sir Philip Albert Gustave D.


Bruton, Sir James
Hopkins, John W. W.
Seager, Sir William


Buckley, Lieut.-Colonel A.
Hopkinson, A. (Lancaster, Mossley)
Shaw, Capt. William T. (Forfar)


Bull, Rt. Hon. Sir William James
Horne, Sir R. S. (Glasgow, Hillhead)
Smith, Sir Allan M. (Croydon, South)


Butcher, Sir John George
Hunter-Weston, Lieut.-Gen. Sir A. G.
Smith, Sir Harold (Warrington)


Carr, W. Theodore
Hurst, Lieut.-Colonel Gerald B.
Smith, Sir Malcolm (Orkney)


Carter, R. A. D. (Man., Withington)
Jackson, Lieut.-Colonel Hon. F. S.
Sprot, Colonel Sir Alexander


Chamberlain, Rt. Hn. J. A. (Birm. W.)
Jameson, John Gordon
Stanier, Captain Sir Beville


Chamberlain, N. (Birm., Ladywood)
Jephcott, A. R.
Stanley, Major Hon. G. (Preston)


Child, Brigadier-General Sir Hill
Jesson, C.
Steel, Major S. Strang


Churchill, Rt. Hon. Winston S.
Jones, Sir Edgar R. (Merthyr Tydvil)
Sturrock, J. Leng


Churchman, Sir Arthur
Jones, Sir Evan (Pembroke)
Sugden, W. H.


Clay, Lieut.-Colonel H. H. Spender
Jones, Henry Haydn (Merioneth)
Surtees, Brigadier-General H. C.


Clough, Robert
Joynson-Hicks, Sir William
Sutherland, Sir William


Coats, Sir Stuart
King, Captain Henry Douglas
Thomas-Stanford, Charles


Colfox, Major Wm. Phillips
Lane-Fox, G. R.
Thomson, F. C. (Aberdeen, South)


Colvin, Brig.-General Richard Beale
Law, Alfred J. (Rochdale)
Thomson, Sir W. Mitchell- (Maryhill)


Conway, Sir W. Martin
Lewis, Rt. Hon. J. H. (Univ., Wales)
Thorpe, Captain John Henry


Coote, Colin Reith (Isle of Ely)
Lister, Sir R. Ashton
Tickler, Thomas George


Cory, Sir J. H. (Cardiff, South)
Lloyd, George Butler
Turton, Edmund Russborough


Craik, Rt. Hon. Sir Henry
Lloyd-Greame, Sir P.
Waddington, R.


Davies, Thomas (Cirencester)
Locker-Lampson, G. (Wood Green)
Walters, Rt. Hon. Sir John Tudor


Davies, Sir William H. (Bristol, S.)
Locker-Lampson, Com. O. (H'ting d'n)
Ward-Jackson, Major C. L.


Davison, Sir W. H. (Kensington, S.)
Lorden, John William
Watson, Captain John Bertrand


Dawes, James Arthur
Loseby, Captain C. E.
Wheler, Col. Granville C. H.


Denniss, Edmund R. B. (Oldham)
M'Curdy, Rt. Hon. Charles A.
White, Col. G. D. (Southport)


Dewhurst, Lieut.-Commander Harry
Mackinder, Sir H. J. (Camlachie)
Wild, Sir Ernest Edward


Dockrell, Sir Maurice
McLaren, Robert (Lanark, Northern)
Williams, C. (Tavistock)


Doyle, N. Grattan
M'Lean, Lieut.-Col. Charles W. W.
Willoughby, Lieut.-Col. Hon. Claud


Du Pre, Colonel William Baring
Macleod, J. Mackintosh
Wilson, Lt.-Col. Sir M. (Bethnal Gn.)


Elliot, Capt. Walter E. (Lanark)
McMicking, Major Gilbert
Wilson, Col. M. J. (Richmond)


Eyres-Monsell, Com. Bolton M.
McNeill, Ronald (Kent, Canterbury)
Winterton, Earl


Falcon, Captain Michael
Macpherson, Rt. Hon. James I.
Wise, Frederick


Falle, Major Sir Bertram Godfray
Maddocks, Henry
Wood, Hon. Edward F. L. (Ripon)


Fell, Sir Arthur
Manville, Edward
Wood, Sir J. (Stalybridge & Hyde)


FitzRoy, Captain Hon. Edward A.
Marriott, John Arthur Ransome
Woolcock, William James U.


Flannery, Sir James Fortescue
Middlebrook, Sir William
Worthington-Evans, Rt. Hon. Sir L.


Ford, Patrick Johnston
Molson, Major John Elsdale
Yate, Colonel Sir Charles Edward


Foreman, Sir Henry
Montagu, Rt. Hon. E. S.
Young, E. H. (Norwich)


Forestier-Walker, L.
Morrison-Bell, Major A. C.



Fraser, Major Sir Keith
Nail, Major Joseph
TELLERS FOR THE NOES.—


Ganzoni, Sir John
Neal, Arthur
Colonel Leslie Wilson and Mr.


Gardiner, James
Nicholson, Reginald (Doncaster)
Dudley Ward.


Gee, Captain Robert
Nicholson, William G. (Petersfield)

NEW CLAUSE.—(Amendment of 10 and 11 Geo. V., c. 18, s. 22.)

Section twenty-two of the Finance Act, 1920 (which provides for a deduction from assessable income in respect of dependent
relatives), shall have effect as if for the words "twenty-five pounds" there were substituted the words "fifty pounds."—[Mr. G. Barker.]

Brought up, and. read the First time.

Mr. BARKER: I beg to move, "That the Clause be read a Second time."
The object of this Amendment is to redress a serious injustice perpetrated by Section 22 of the Finance Act of 1920, which restricts abatement of Income Tax to £25 for the maintenance of a dependent relative. I thought this Amendment would find ready acceptance, and I was very much disappointed by the speech of the Chancellor of the Exchequer with reference to the Amendment under discussion half an hour ago. The Chancellor of the Exchequer took up the attitude that in every Act of Parliament there are certain defects, and if any of these defects are eliminated it upsets the whole balance of that Act of Parliament. That seemed to me an amazing argument to use in a deliberative Assembly. It seemed to me a counsel not of perfection but of imperfection which would justify opposition to the most reasonable Amendments. I do not think anyone can contend that £25 is sufficient to maintain an adult person. It is simply 9s. 7d. per week. If we said that 25s. a week was the minimum amount to maintain an adult, we should not be guilty of exaggeration. Twenty-five shillings per week is £65 per year, which is £40 more than the abatement at present allowed. That £40 has to be paid by a claimant who is keeping a dependant relative, and the Government not only gives a man no encouragement for keeping a dependant relative, but actually taxes him to the tune of 5s. in the pound for the £40 he spends in maintaining that relative. Not only is it a most humane act for a man to maintain a dependant relative, but it is a noble act, and it is, as a matter of fact, a duty; but the man who does it is not only doing a humane act, but he is performing a service to the State and possibly to the Poor Law.
Therefore there can be no justification whatever for allowing such a small abatement as £25. It is most unjust to put a tax on the £40 that is expended in the maintenance of a dependent relative. It is not Income Tax in any sense of the word. It is a tax on expenditure—expenditure of a very noble and humane kind—and I hope the Government will respond to the strength of the appeal that is made in this Amendment. I am certain that no grounds of economy can justify the perpetration and perpetuation of injustice of this character. Taxation should be
equitable and just, and no financial straits will justify an injustice of this character. Therefore I strongly appeal to the Committee and to the Government to accept this Amendment. The Amendment will benefit everyone in the State that has to keep a dependent relative. I am not moving it because I am on the Labour Benches. It will have a general application to the whole country, and I hope the Government will refuse to continue penalising men and women who are doing noble work of this kind. Reference has been made this afternoon to cases that have been before the magistrates. There was a case reported, I think, in the "Observer" a week last Sunday, which created general interest in the country. It was the case of a business man in London, a widower, whose daughter kept house for him, and he was not allowed anything but the £135 abatement. The man was so incensed by the injustice that he refused to pay his Income Tax, and was brought before the magistrates on purpose to expose this injustice in the law. The magistrate sympathised with him, and when he had got the sanction of the Court to the act he had done he paid his Income Tax. It is anomalies of this character that create a great deal of irritation in the country, and it should be the first duty of the Government to remedy such anomalies.

Mr. G. BARNES: If necessary, I should like to associate myself with the hon. Gentleman who has just spoken and second this Amendment. It is a simple filial duty that is being performed by the son under the circumstances, and it is very common among working people, as we all know, if the father dies for the son or sons to discharge the obligations of the father. Some years ago, when the tax was small, nobody bothered about it, but now that the tax is large it makes a very considerable inroad upon a poor man's income, and for that reason I associate myself with the proposition that has just been made. I want to put a new point to the learned Solicitor-General. Sometimes this duty is undertaken not by one son, but by two, and if my memory serves me right this exemption is given only in the event of the son wholly maintaining this dependant relative. If that be so, it seems to cut out the case of two sons who may be maintaining a relative between them,
half each. I should like to know if that is so, and if it is so there ought to be some provision made whereby if there are two sons and if they between them maintain a relative they should be allowed the abatement. There is another small point. Is it necessary to have a legal document drawn up in order to get the benefit of this exemption, because if so, it may have the effect of preventing a good many men getting the benefit of it. Workmen do not want to bother with lawyers. They know the law costs money, and is very uncertain, and they would rather have this relief on proof being given of a common-sense nature.

The SOLICITOR- GENERAL (Sir Ernest Pollock): The right hon. Gentleman the Member for Gorbals (Mr. G. Barnes) has told us that people do not like to be worried by lawyers and therefore I shall endeavour to be brief. First let me say that the view presented by the hon. Member for Abertillery (Mr. Barker) and also by the right hon. Gentleman who seconded the Amendment is shared by the whole Committee. There are a great many people in all ranks and classes of life who maintain relatives who are not able to maintain themselves. It certainly should not be claimed that that is a special privilege or duty exercised by any particular class. As the hon. Member for Abertillery rightly said, it is a duty which is fulfilled. May I make this observation? Sometimes when we are discussing the Finance Act we look upon these matters of family ties and family duties too much in the light of pounds, shillings and pence. I do not think that those who perform the duties look upon them at all in that light. I believe they perform them from the highest possible motives, and I do not believe, whether the abatement is made larger or smaller, there will be less of these noble qualities shown among all sections of the nation.
With regard to the particular Amendment, may I say this—perhaps one ought to get one's true perspective on questions of this sort—it was the Finance Act of 1920 which first recognised that some relief should, if we could afford it, be given in these cases, and the result was that the relief which is now sought to be amended was given, and the amount of that relief was increased by the Act beyond what the Royal Commission suggested. The Royal Commission suggested
the sum of £25, but having regard to the difference between assessable income and taxable income, the amount is really above that sum. When we have given that, it is not quite fair for the hon. Member for Abertillery to say £25 is not enough to maintain a person. We all agree, but one must look at it from a different point of view. What the Act of 1920 did was to recognise that a number of persons carried out, and nobly carried out, those responsibilities which fell upon them. Therefore, the Act says it is possible to give a certain amount of relief in those cases. That relief was fixed at a sum which was placed in the Act of 1920, not at all by way of being a sum which would enable that duty to be performed, or as being a proper estimate of the cost of maintaining the relatives, but as being an. allowance, a relief, which the State could afford to give in recognition of the duty performed and a relief which had not been given before. I am sorry to say that, under the circumstances of the present time it is really impossible to increase that relief, but let no one believe that the sum is granted for the purpose of maintenance or carrying out a duty. It is in relief of those persons who fulfil their duty. May I now answer my right hon. Friend's questions? If he will look at the Section of the Act, he will see the terms are, "If the claimant proves," and it is not necessary that there should be a legal document for that proof to be given. A short investigation by the surveyor of taxes is all that is necessary. In many localities the people are quite well known. Everybody knows that a particular householder has a relative living with him. Certainly no reference to a lawyer or a legal document is necessitated as a condition precedent.

Mr. BARNES: Is it applicable only to those people who have dependent relatives living with them?

Sir E. POLLOCK: The Section says:
If the claimant proves he maintains at his own expense any person.
It does not include that condition. Perhaps I improperly indicated or suggested there might be that limitation. That is not so. The second question asked was in the case of two persons who jointly proved—

Major MORGAN: Two or more.

Sir E. POLLOCK: I do not think there is any difficulty about that. A per-
son who proves that he maintains or contributes to maintain another person will be entitled to ask for the reduction. Of course that would have to be investigated, because the relief cannot be duplicated by the fact that two persons maintain the same individual. I do not think any difficulty would arise, because as a matter of fact the probability is, one person would make himself responsible for the maintenance and would collect contributions from other persons who shared the responsibility with him. I suppose every person in this House knows of such cases within his own knowledge.

Mr. GRUNDY: I am exceedingly sorry the right hon. Gentleman offers no hope of this concession being given. I was more than surprised he gave us no facts or figures as to the number of persons who maintained dependent relatives or the reduction which is likely to be involved in the national revenue. One would have thought we might have been supplied with particulars as to the numbers affected and the amount of revenue involved in increasing this relief from £25 to £50.

Sir E. POLLOCK: I will give the hon. Member the figures. In the current year the increase burden on the Exchequer would be a sum of £120,000, and in a full year the cost would be £300,000.

8.0 P.M.

Mr. GRUNDY: I am very much obliged to the hon. and learned Gentleman because it helps one to point out to this Committee that this concession we are asking for does not involve a very large sum of money. One is rather deterred in this House from giving those extreme cases which are known to all of us who live in working-class areas, but I do not want to narrow the discussion down to working-class areas because this filial love and responsibility applies to all classes of the community. I could give one or two striking examples. Here is a widowed mother. Her eldest son with a large family is unable to take his mother in, though more than willing. A married sister takes the mother in, with the consent of her husband, and the son-in-law who carries the responsibility of his wife's mother receives the small relief of £25. When such a small sum is involved as that mentioned by the right hon. Gentleman, £300,000, I think this is a concession that might be made, and made
for this reason: I take it it is part of this House's duty to encourage all that is best in human nature. The learned Gentleman put the case in better language than I can command. He pointed out that these people recognised their responsibilities and generally accepted them, but there are some that might not, and this increase that we are asking for might mean that many who would otherwise drift into the Poor Law institutions would be taken in by some of their relatives. I am exceedingly sorry that the right hon. and learned Gentleman gives us no hope of receiving this concession. I could point out to the Chancellor of the Exchequer that in my opinion the concession, which only means £300,000 and deals with a matter of this kind, would be a very good expenditure indeed to allow to the people that take unto themselves these responsibilities.

Mr. W. GRAHAM: I am very reluctant to delay the Committee in any way, but I think I am correct in saying that this is the first occasion in recent years in which we have got absolutely no concession of any kind on these allowances while the Finance Bill has been in Committee. There is a strong case for this Amendment. Strictly speaking, there are three classes of dependant relatives. The first class is the dependant relative who by reason of old age or infirmity is unable to maintain himself or herself and is maintained in the home of this, applicant for the abatement. In the second place, there is the widowed mother of either the applicant himself or of his wife, whether incapacitated or not. Then, in the third place, there is the case of the father whose daughter is resident with him and upon whose services he absolutely depends by reason of his infirmity or old age or other cause. The point to which I wish to direct attention is that in the first two cases, which are admittedly hard enough, absolutely no abatement of any kind is given if the incapacitated individual has an income of £50 or over. It will not. be suggested that £50 per annum is in any way adequate to maintain an incapacitated individual in that position under present circumstances, and yet in those cases the abatement of £25 is refused. In the third case I recognise that that condition does not apply. There is only one other point.
Those of us who have had occasion to be connected with the work of local authorities know that this abatement covers a very large number of people who are on the border line of passing over to the care of Poor Law and other institutions. I am perfectly satisfied that the argument of the hon. Member for Rother Valley (Mr. Grundy) is sound, namely, that if a little more generous abatement were given, many people would be willing to undertake the duty of looking after aged relatives. I think in the long run this concession would be found to be a very good investment for the State. I therefore hope that even yet the Government may give us this concession, seeing that up to this stage we have got absolutely nothing from the Chancellor of the Exchequer, which is perhaps not surprising when a Scotsman is now in charge of the national money-bags; but seeing we have got absolutely nothing so far, I do appeal most strongly to him to grant the little consideration asked for in the Amendment.

Mr. HAYWARD: I would like to add my word to that of the hon. Member who has just sat down. I entirely agree with what was said by the right hon. Gentleman the Solicitor-General that the person who undertakes the liability of maintaining a relative does so uninfluenced by any

consideration whatever of any concession accorded in the Finance Act, but, after all, we are considering these relationships in connection with the Finance Act. The right hon. Gentleman said that the principle underlying the abatement which was made in 1920 was not that the concession was made with the view of allowing sufficient for the maintenance of the relative, but that it was merely a recognition of the situation which was created by the maintenance of the relative by the son or daughter, as the case might be. I do not know where the learned Solicitor-General got that idea from. It may have been in the Debates which took place at the time, but I should have thought that the natural construction of the concession was that it was a concession or allowance for maintenance, that it was taken into consideration that it would cost a certain amount of money to discharge the obligation, and an abatement was allowed for that amount. I can conceive of no other principle on which it could have been logically granted. If that be so, can anyone say that the sum of £25 allowed in these cases should be considered the maximum? In these times I am sure nobody would agree that £25 is sufficient, and I hope the full £50 will be allowed.

Question put, "That the Clause be read a Second time."

The Committee divided: Ayes, 53; Noes, 194.

Division No. 184.]
AYES.
[8.14 p.m.


Barnes, Rt. Hon. G. (Glas., Gorbals)
Graham, R. (Nelson and Colne)
Myers, Thomas


Barnes, Major H. (Newcastle, E.)
Graham, W. (Edinburgh, Central)
Newbould, Alfred Ernest


Barton, Sir William (Oldham)
Grundy, T. W.
Raffan, Peter Wilson


Benn, Captain Wedgwood (Leith)
Guest, J. (York, W. R., Hemsworth)
Rees, Capt. J. Tudor- (Barnstaple)


Bowerman, Rt. Hon. Charles W.
Hallas, Eldred
Richardson, R. (Houghton-le-Spring)


Bramsdon, Sir Thomas
Hartshorn, Vernon
Robertson, John


Breese, Major Charles E.
Hayday, Arthur
Royce, William Stapleton


Bromfield, William
Hayward, Evan
Spencer, George A.


Brown, James (Ayr and Bute)
Hodge, Rt. Hon. John
Swan, J. E.


Cairns, John
Holmes, J. Stanley
Thomson, T. (Middlesbrough, West)


Cape, Thomas
Irving, Dan
Thorne, G. R. (Wolverhampton, E.)


Carter, W. (Nottingham, Mansfield)
Johnstone, Joseph
Waterson, A. E.


Cowan, D. M. (Scottish Universities)
Kenworthy, Lieut.-Commander J. M.
Williams, Aneurin (Durham, Consett)


Davies, A (Lancaster, Clitheroe)
Kenyon, Barnet
Williams, Col. P. (Middlesbrough, E.)


Davison, J. E. (Smethwick)
Lawson, John James
Wood, Major M. M. (Aberdeen, C.)


Edwards, Major J. (Aberavon)
MacVeagh, Jeremiah



Finney, Samuel
Mallalieu, Frederick William
TELLERS FOR THE AYES.—


Galbraith, Samuel
Morgan, Major D. Watts
Mr. Frederick Hall and Mr. G.


Glanville, Harold James
Murray, Dr. D. (Inverness & Ross)
Barker.


NOES.


Addison, Rt. Hon. Dr. Christopher
Balfour, George (Hampstead)
Bird, Sir William B. M. (Chichester)


Agg-Gardner, Sir James Tynte
Barlow, Sir Montague
Boyd-Carpenter, Major A.


Amery, Leopold C. M. S.
Barnett, Major Richard W.
Bridgeman, Rt. Hon. William Clive


Armitage, Robert
Barnston, Major Harry
Briggs, Harold


Ashley, Colonel Wilfrid W.
Bell, Lieut.-Col. W. C. H. (Devizes)
Brittain, Sir Harry


Atkey, A. R.
Bellairs, Commander Carlyon W.
Broad, Thomas Tucker


Bagley, Captain E. Ashton
Betterton, Henry B.
Brown, Major D. C.


Baird, Sir John Lawrence
Birchall, Major J. Dearman
Bruton, Sir James


Baldwin, Rt. Hon. Stanley
Bird, Sir A. (Wolverhampton, West)
Buckley, Lieut.-Colonel A.


Bull, Rt. Hon. Sir William James
Henry, Denis S. (Londonderry, S.)
Pinkham, Lieut.-Colonel Charles


Carr, W. Theodore
Hewart, Rt. Hon. Sir Gordon
Pollock, Sir Ernest Murray


Carter, R. A. D. (Man., Withington)
Hickman, Brig.-General Thomas E.
Pratt, John William


Chamberlain, Rt. Hn. J. A. (Birm. W.)
Hinds, John
Prescott, Major W. H.


Churchman, Sir Arthur
Hood, Joseph
Pretyman, Rt. Hon. Ernest G.


Clough, Robert
Hope, Sir H. (Stirling & Cl'ckm'nn'n,W.)
Purchase, H. G.


Coats, Sir Stuart
Hope, Lt.-Col. Sir J. A. (Midlothian)
Rae, H. Norman


Colfox, Major Wm. Phillips
Hopkins, John W. W.
Randles, Sir John Scurrah


Colvin, Brig.-General Richard Beale
Hopkinson, A. (Lancaster, Mossley)
Rankin, Captain James Stuart


Conway, Sir W. Martin
Horne, Sir R. S. (Glasgow, Hillhead)
Remer, J. R.


Coote, Colin Reith (Isle of Ely)
Hotchkin, Captain Stafford Vere
Richardson, Alexander (Gravesend)


Cory, Sir J. H. (Cardiff, South)
Hunter, General Sir A. (Lancaster)
Robinson, S. (Brecon and Radnor)


Craik, Rt. Hon. Sir Henry
Hunter-Weston, Lieut.-Gen. Sir A. G.
Rodger, A. K.


Curzon, Captain Viscount
Hurd, Percy A.
Samuel, A. M. (Surrey, Farnham)


Davies, Alfred Thomas (Lincoln)
Hurst, Lieut.-Colonel Gerald B.
Samuel, Samuel (W'dsworth, Putney)


Davies, Major D. (Montgomery)
Jackson, Lieut.-Colonel Hon. F. S.
Sanders, Colonel Sir Robert Arthur


Davies, Thomas (Cirencester)
Jameson, John Gordon
Seager, Sir William


Davison, Sir W. H. (Kensington, S.)
Jephcott, A. R.
Seddon, J. A.


Dawes, James Arthur
Jesson, C.
Seely, Major-General Rt. Hon. John


Denniss, Edmund R. B. (Oldham)
Jones, Sir Edgar R. (Merthyr Tydvil)
Shaw, Capt. William T. (Forfar)


Dewhurst, Lieut.-Commander Harry
Jones, Sir Evan (Pembroke)
Smith, Sir Harold (Warrington)


Dockrell, Sir Maurice
Jones, G. W. H. (Stoke Newington)
Smith, Sir Malcolm (Orkney)


Doyle, N. Grattan
Jones, Henry Haydn (Merioneth)
Sprot, Colonel Sir Alexander


Edwards, Hugh (Glam., Neath)
Kellaway, Rt. Hon. Fredk. George
Stanier, Captain Sir Beville


Elliot, Capt. Walter E. (Lanark)
Kidd, James
Stanley, Major Hon. G. (Preston)


Evans, Ernest
King, Captain Henry Douglas
Steel, Major S. Strang


Eyres-Monsell, Com. Bolton M.
Lane-Fox, G. R.
Sturrock, J. Leng


Falcon, Captain Michael
Law, Alfred J. (Rochdale)
Sugden, W. H.


Falle, Major Sir Bertram Godfray
Lindsay, William Arthur
Surtees, Brigadier-General H. C.


Fell, Sir Arthur
Lister, Sir R. Ashton
Thomas-Stanford, Charles


Fildes, Henry
Lloyd, George Butler
Thomson, F. C. (Aberdeen, South)


Flannery, Sir James Fortescue
Lloyd-Greame, Sir P.
Thomson Sir W. Mitchell- (Maryhill)


Ford, Patrick Johnston
Locker-Lampson, Com. O. (H'tingd'n)
Thorpe, Captain John Henry


Foreman, Sir Henry
Lorden, John William
Tickler, Thomas George


Forestier-Walker, L.
Loseby, Captain C. E.
Turton, Edmund Russborough


Foxcroft, Captain Charles Talbot
M'Curdy, Rt. Hon. Charles A.
Waddington, R.


Fraser, Major Sir Keith
Mackinder, Sir H. J. (Camlachie)
Walters, Rt. Hon. Sir John Tudor


Fremantle, Lieut.-Colonel Francis E.
McLaren, Robert (Lanark, Northern)
Ward-Jackson, Major C. L.


Gange, E. Stanley
Macleod, J. Mackintosh
Watson, Captain John Bertrand


Ganzoni, Sir John
McNeill, Ronald (Kent, Canterbury)
White, Col. G. D. (Southport)


Gardiner, James
Maddocks, Henry
Wild, Sir Ernest Edward


Gee, Captain Robert
Manville, Edward
Williams, C. (Tavistock)


Gibbs, Colonel George Abraham
Middlebrook, Sir William
Willoughby, Lieut.-Col. Hon. Claud


Gilbert, James Daniel
Mitchell, William Lane
Wilson, Lt.-Col. Sir M. (Bethnal Gn.)


Gilmour, Lieut.-Colonel Sir John
Molson, Major John Elsdale
Wilson, Col. M. J. (Richmond)


Goulding, Rt. Hon. Sir Edward A.
Montagu, Rt. Hon. E. S.
Winterton, Earl


Green, Joseph F. (Leicester, W.)
Moore, Major-General Sir Newton J
Wise, Frederick


Greene, Lt.-Col. Sir W. (Hack'y, N.)
Nail, Major Joseph
Wood, Hon. Edward F. L. (Ripon)


Greig, Colonel Sir James William
Neal, Arthur
Wood, Sir J. (Stalybridge & Hyde)


Hacking, Captain Douglas H.
Nicholson, Reginald (Doncaster)
Woolcock, William James U.


Hallwood, Augustine
Ormsby-Gore, Hon. William
Worsfold, T. Cato


Hall, Lieut.-Col. Sir F. (Dulwich)
Parker, James
Worthington-Evans, Rt. Hon. Sir L.


Hamilton, Major C. G. C.
Pearce, Sir William
Young, E. H. (Norwich)


Hannon, Patrick Joseph Henry
Peel, Col. Hon. S. (Uxbridge, Mddx.)



Harmsworth, C. B. (Bedford, Luton)
Perkins, Walter Frank
TELLERS FOR THE NOES.—


Henderson, Major V. L. (Tradeston)
Perring, William George
Colonel Leslie Wilson and Mr.


Hennessy, Major J. R. G.
Pilditch, Sir Philip
Dudley Ward.

It being after a quarter-past Eight of the Clock, and leave having been given to move the Adjournment of the House, under Standing Order No. 10, further Proceeding was postponed, without Question put.

MURDER OF OFFICERS (IRELAND).

Earl WINTERTON: I beg to move, "That this House do now adjourn."
The terms of the Motion which I received permission at Question Time today to move were as follow:
To call attention to a matter of definite urgent public importance, namely, 'the failure of His Majesty's Government to take any effective steps to secure the safety of
officers of His Majesty's Army in Ireland when off duty, as shown by the murder of many such officers within the last five days.'
The terms of the Motion are strictly limited, intentionally so, and I will endeavour to do my best to keep within the bounds of order and within the limits of the Resolution. Perhaps I may commence by quoting to the House the answer which the right hon. Gentleman the Secretary for War gave to me on this subject to-day. He said:
I have full confidence in the Commander-in-Chief in Ireland. I am sure the suggestion of my Noble Friend will not have escaped his attention. I am convinced he will do everything in his power to ensure the safety of the officers and men under his command.
It is on account of the grave doubts that I and others have as to, I will not say, the ability, but up till now the practical result of the efforts of the Commander-in-Chief that I took the step of asking leave to move the Adjournment of the House. It puts anyone who holds the views I do upon Ireland necessarily in a delicate position in having to move a Motion of this kind, for one's attitude might quite easily be misunderstood—the attitude of those like my hon. and gallant Friend (Lieut.-Colonel Guinness) who is unable to be present and myself. We have taken a more or less active part in the discussions on various aspects of the Irish question, and our words, in view of our association with Ireland, are very widely quoted in the Press of Southern Ireland. Hence I want to do nothing to alter the clearly expressed intention of my hon. and gallant Friend and myself, expressed on many occasions in this House, to support the Government in all necessary military and police measures, however unpalatable to hon. Members opposite, to suppress insurrection and murder in Ireland with certain exceptions which we have made clear in previous debates and which it would not be in order to refer to to-night: I refer to reprisals.
The first question that I think in a Debate of this kind ought to be put is: What was the nature and what were the facts of these particular murders to which my Motion refers, those murders which have taken place in the last few days? They were crimes as vicious and as revolting as anything that has taken place in the history of Ireland during the last two years. I will not mention the names of these officers as I wish to save their relatives the pain of mentioning their beloved ones, for they have already suffered enough. No less than five officers were murdered in these terrible circumstances. I should like to refer to one of these cases where an officer was shot in a motor car. The driver of the car was a lady, and she was compelled to drive to the mountains where this wounded officer was taken out and brutally murdered in circumstances of deliberate brutality reminiscent of the French Revolution and of the very worst aspects of Bolshevik régime in Russia. The only difference is that in Russia the real instigators are known, while in Ireland they shelter themselves behind the
people who sympathise with them, and the real promoters and those who. are responsible for these crimes are on a lower moral plane than even Lenin and Robespierre because they were not afraid of making themselves responsible for murder.
The murder I have mentioned is not an isolated one because murder of officers has been going on for months and months. I ask both sides of this House, and especially those who served in His Majesty's forces during the War, to realise what the effect must be on the moral of any regiment or unit who saw their officers being murdered in this way. The effect must be terrible. As regards the effect on public opinion in Ireland and in the world of this murdering of officers off duty without the Government being able to prevent them or capture the murderers, the effect on our prestige in the world in general must be deplorable.
I wish to ask now what precautions have been taken to avoid these incidents. These are not isolated cases. Some particularly terrible murders took place in Ireland last winter which were squalid and cowardly to the last degree. As far as I know only one man has been arrested in connection with these murders. The Government and the Commander-in-Chief have had plenty of warning as to the extent to which these people would go in attacking officers off duty. On this question I am anxious to avoid any violent language because I do not wish to do anything to make the task of those who are trying to restore order in Ireland greater. The Secretary of State for War has already replied that the Government have full confidence in the Commander-in-Chief in regard to this matter. I wish to ask if the right hon. Gentleman can state what precautions are being taken to protect these officers when they are off duty. I know the answer which has so often been given is that it is not in the public interest to state what safeguards have been taken.
I quite recognise that here anyone who holds such views as I do on this question is skating on very thin ice. I admit it is possible to play into the hands of the insurgents—and there happen to be some sympathisers with them, in this country, and there are more than at first sight appears—by compelling the Government to disclose the measures they have taken for the protection of these officers. I think anyone is entitled to say that the
time has come when the situation is so serious, when the measures taken to deal with this aspect of the case have proved to be inefficacious, that it is better to start ab initio and have a full and frank discussion as to the proper military measures to be taken, and for the House to express its opinion as to the way the representatives of the War Office have dealt with this question. I would never be a party to any attempt to vilify the troops or the police in Ireland. I can speak with emphasis on that matter, because my hon. Friends and I have always supported the Government through thick and thin, and tried to shout down hon. Members opposite who have attempted, in my opinion, to vilify the troops and the police in Ireland. What most people want to see is that the measures which are being carried out should be carried out with efficiency and success.
With regard to the precautions very little information is forthcoming in the Press. When these murders take place very little information is forthcoming of the actual circumstances under which they take place. If the right hon. Gentleman feels it to be his duty to refrain from informing the House, I shall be reluctantly compelled to accept his decision, but I should like to know if any regulations are in force such as were in operation behind the various Fronts during the War, when officers were not allowed to go abroad except with an escort and they always had to be armed. Behind the lines it was considered necessary to have some escort with an officer, and I maintain that in the appalling conditions surrounding His Majesty's troops in the South of Ireland, some such precaution ought to be taken. I want to know if any regulations of this kind have been issued. I think if every officer was compelled to go abroad with a servant or with an orderly armed with a rifle it would avoid some of these incidents. The officer who was taken away to the mountains apparently had no other soldier with him.
The right hon. Gentleman may say, "After all, how can you compare the conditions which prevailed at the Front during the War with the conditions in Ireland, where you cannot prevent an officer from playing tennis or golf?" If that is the case, I am prepared to say, in view of the appalling frequency of
these murders, that some such steps should be taken as I have indicated. If it is impossible for officers to take part in the ordinary social life of Ireland and attend dances and play tennis and golf, and if it is impossible to provide an adequate escort for them under those circumstances, then provision should be made for better recreation for both officers and men in barracks, in the nature of tennis courts and football grounds, and so on. I do not say it is necessary to go as far as that, but I would like to know if the Government have taken the obvious precaution of forbidding any officer to go out unless accompanied by another officer or by a soldier. I have seen something of the Auxiliaries. They take no such risks as do the officers of the Army. Three of them, one a friend of mine, happened quite recently to be leaving Ireland for England at the same time as I was. I noticed that they were escorted to the quay by men of their own division with rifles held at the ready, and when they got out of the car to go on to the boat each man had a revolver in his hand. That is the only way in which servants of the Crown in Ireland can now move about that country.
Apparently some of the officers who have been murdered have gone out cycling unarmed. There is a very strong impression in the minds of many people who know something of the condition of affairs in Ireland that the regulations with regard to what I may call personal discipline in the Army in Ireland have not been adequately carried out; that regulations are made but are not enforced, and the people responsible for not carrying them out are not punished as they should be. During the War we had in the Army a system of discipline which was very effective, even in the case of people naturally most undisciplined from some of the wilder industrial districts. The discipline imposed on everyone proved to be stronger even than that in the German army at the outbreak of War, and it largely enabled us to win the War. Faults wherever committed were punished immediately in the most drastic manner, and the case of General Gough was an instance in kind. In the conditions under which troops are serving in Ireland it is absolutely necessary, however unpleasant the duty may be, to impose the same rigid iron discipline, and an officer who
deliberately imperils his safety—and here, of course, I am not referring to the unfortunate officers who have been murdered—anyone who fails to carry out the regulations should be court martialled. There should be no question of his merely being brought before his commanding officer: he should be court martialled and suffer the due penalty for his action. So far as one can judge from the impression one gets there is still a great deal to be done in Ireland in the way of tightening up the general discipline of the forces in this regard.
The right hon. Gentleman may tell the House that he could carry out these suggestions if he had sufficient troops in Ireland, and could ensure that no officer should be allowed to go out unaccompanied. If the right hon. Gentleman should say that, my reply would be that if more troops are wanted it is his duty to take the necessary steps immediately to increase the number of soldiers in Ireland, and if his rejoinder to that should be, "How can we increase them?" then I would point out deliberately that inasmuch as it was possible very recently to hold a military tournament in London in which thousands of troops were engaged, and inasmuch there are plenty of household troops, foot and cavalry available, they ought to be utilised for the purpose of restoring order in Ireland. I am aware that any such proposal would be received with a lack of enthusiasm in this country, and the reason for that is this, that neither in this country nor in this House has the full seriousness of the situation in Ireland been realised. I was talking to an officer the other day who rather cried out against sending the Guards to Ireland, but I assert that if the present condition of Ireland is the result of an armed insurrection then it has become a purely military problem, and so long as there is in this country a single soldier who can be spared, he should be sent forthwith to Ireland. We hear a great deal about the sporting contests which are going on in this country to-day, but surely the far greater problem involved in the failure of the country which defeated the Prussians to restore order and good government in the South of Ireland is a matter which should seriously concern—

Mr. DEPUTY-SPEAKER (Sir E. Cornwall): It is not open to the Noble
Lord to go into the general question of the Government of Ireland. The only point raised by the Motion is as to the steps which the Government are taking to safeguard the lives of officers in Ireland, and it is only the action of the Government in that respect which is now under consideration.

Earl WINTERTON: I was going to say it was impossible to restore good government in the South of Ireland unless you carry out the elementary military precautions for safeguarding the lives of the officers on duty in Ireland. I may have been going somewhat wide of the terms of the Motion, but I mentioned this in order to show the tremendous importance of the whole problem which is involved in the terms of the Resolution I am venturing to propose. I will put it in another way. Unless you can assure the safety of your own Army officers, especially when they are off duty, you can never carry out any satisfactory policy for the settlement of the Irish question generally. I will go so far as to say that is the test of how the Government are succeeding is to be found in matters such as that which forms the subject of this Debate. I am prepared to say quite frankly that, if the answer of the right hon. Gentleman is that neither he nor the Commander-in-Chief—and I think the Government have shown a tendency lately to shelter themselves behind the broad shoulders of the Commander-in-Chief—if it is the answer of the Secretary of State for War that neither he nor the Commander-in-Chief can take greater steps than have already been taken to protect the lives of their officers when off duty in the South of Ireland, then, holding the view which I believe the majority of people in this country hold, that it is necessary to put down murder and insurrection in Ireland, and you can only do it by carrying out in the first instance precautions such as I have indicated, I say that similar circumstances arise to those which constantly arose during the War. If one Minister and one Commander-in-Chief cannot carry the matter to a successful issue, let us have another Minister and another Commander-in-Chief. In that connection, let me say that I am no enemy of the Commander-in-Chief in Ireland. In private life I have the honour and advantage of his friendship, and I certainly am not biased against him. But General Macready
was not the only successful soldier in the Army during the War. If he cannot succeed, there are others who may do so. I will not mention many names, but there are Lord Cavan, General Ironside, General Dunsterville, Sir John Macdonagh, and others.
I will tell the right hon. Gentleman another thing which I think he will remember, as he has been, like myself, a close student of political events during the last ten years. Often during the War, when a particular Minister failed to carry to a successful issue the policy of the office which he controlled, that Minister was changed for a more successful one. While I am not prepared to go so far as my Noble Friend the Member for Hitchin (Lord R. Cecil) did the other day, when he said that the only way in which to get a better condition of affairs in Ireland was to change both the Chief Secretary and the Prime Minister, I am inclined to think that the day may come when the great issue in this country will not be the sort of issue we have been discussing lately, but the issue as to whether or not the Government are succeeding in their military policy and in their capacity to protect the lives of their servants, who, under conditions of appalling difficulty, provocation and strain, are doing their best to carry out the duty which has been placed upon them. The issue may well be the capacity of the Government adequately to protect its servants. If it does not protect them adequately, then nine-tenths of the people of this country, who are determined to see the Crown forces' in Ireland given proper protection and proper organisation in their difficult task, will rise up and say, "If the right hon. Gentleman and his colleagues are unable to do this, let us find someone who can," and they will take the attitude which in the long run is really the only possible attitude, that the greatest of all the questions that we have to face to-day is that of the restoration of peace within the United Kingdom.

Mr. LANE-FOX: I beg to second the Motion.
I quite realise the great responsibility of bringing forward a Motion of this kind at this moment in this House, and I am one of the last men in the House who would wish in any way to attack the Government unfairly or to attribute
to them any fault which is not theirs. I want to help the Government, as I think the great majority of the House want to do, because it is only by helping the Government and making helpful suggestions that we can hope to deal with the appalling problem with which we are faced in Ireland. Still less do we want to attack the troops, and I hope that this Motion will in no way be interpreted as a reflection upon them. One of the most deplorable features of the way in which Irish problems are viewed in this country is the want of realisation of the horrors that are going on, and of real practical sympathy, except among a few who have really thought about the matter, for those officers and men in the terrible conditions under which they are living. We in this House are responsible for it. We have sent them there, and it is up to us to see that every condition that can be created to make their lot easier, their lives safer, and their job more successful is carried out. We have a perfect right to ask the Government to give us an assurance, as I hope they will be able to do to-night, that every precaution is being taken, every Regulation is being made, and everything is being done by the Government to secure that those conditions are made more tolerable. I hope that, if this Debate has no other result, it may at any rate, if the echo of it reaches Ireland, make those men, who are living under those conditions, realise that the vast majority of this House sympathise deeply with them, are anxious to help them, and realise the appalling difficulties, dangers, and discomforts under which they work. Things have been said in this House which indicate want of sympathy both with the military and with the police. I hope that this Debate will include nothing of that kind, but will serve to hearten and encourage them in their difficult work, rather than to criticise and discourage.
We want an assurance from the Government, first of all, that none of the appalling things to which my Noble Friend has just referred are due to carelessness on the part of the higher command. We want to be quite certain that every man in the higher command is doing his utmost to take proper precautions, and to insist upon those precautions, and any Regulation which may be made to effect them, being strictly carried out. Nothing can be
truer than what the Noble Lord has just said as to the crime of allowing, by slack discipline, the lives to be needlessly and carelessly sacrificed of officers who are badly needed for leading and protecting their own men. In addition, we want to know that the Intelligence Department is all that it should be, that we want to know that the police and the military are working together. There has been too much indication that there are two forces instead of one. We want it made absolutely certain that they are working together, and that the Intelligence system is sufficiently effective to give them the information that they require, without leaving them at the mercy of a far more ably equipped intelligence system on the other side. We want to know what Regulations are being made for the protection of officers, and, above all, whether they are being obeyed. There is ample evidence to show that, if proper Regulations have been made, they cannot have been properly carried out. Otherwise, many of the deplorable things of which we have been reading lately could not possibly have occurred. Valuable young lives are being lost almost daily. The lives of some of the most splendid young heroes that this country possesses are being frittered away, if these Regulations are not made and prompt precautions are not being taken. I would not use the word "frittered" if the Government can assure us that everything is being done that is possible to safeguard them. But if we are going to make war, let us make war properly. If we are merely going to allow young lives of this value to be frittered away, we had far better give up the idea of making war, and cease to allow our forces to be slowly disintegrated and weakened by the obvious feeling of helplessness and powerlessness which these events must bring about. My Noble Friend has said if the troops are not sufficient let the Government say so. The Government have never lost by telling the truth. Some people think the Government do not tell us enough of the truth. But let us know the whole facts. To guard against the events we read about in the Press I am sure even the Anti-Waste party would be the first to rush into the Lobby to vote for an increase of our troops if it was necessary. Everyone knows what an intolerable life it must be in Ireland and how absolutely necessary it must be for
the officers to get all the recreation that is possible. No one can think of men living under that nervous strain without wishing to give them all possible recreation and everything which can possibly relieve what must be at times an almost intolerable strain. If you are at war you. do not go out to play tennis under fire. No one went over the top to play in No Man's Land. That is the position which we must recognise exists, and it is no use playing with these things. We must face the stern reality of the fact that we are at war and that war conditions prevail, and if we cannot face those facts the sooner we realise that the position is impossible the better. Nothing is so hopeless for the discipline, the strength and the moral of your force as that an impression should be created that you cannot protect them, that the case is hopeless, and above all, that sufficient effort is not being made to safeguard them in every way.
Perhaps the most miserable thing about all this is the apathy and the want of interest that is shown by a great many sections of the community. Our papers are full of sport, and you see a small paragraph in a corner dealing with perhaps two or three of the most brutal and horrible murders. The whole nation has got to wake up to the fact that we are up against a bigger thing in our Irish history than we have ever had before. We have got so hardened to always hearing of an Irish question that many people do not realise that it is bigger and a worse and far more horrible thing than we have ever been up against. But that is no reason why we should despair. It is every reason why the Government should give a full assurance that they are straining every nerve and doing all they possibly can to make a success of the job, and above all, to safeguard the lives of men whom the country can ill afford to spare. In the hope that the Government will be able to satisfy us, I second the Motion, and I only hope that whatever assurance they may be able to give us to-night will also go forth to recruits in Ireland, and that they may realise that in the speeches in this Debate nothing is intended but comfort, help and strength to them, and that this House is united in the desire to make their job a little easier and sympathises with them in the extraordinary difficulties by which they are surrounded.

9.0 P.M.

Captain GEE: I wish to associate myself with hon. Members who have spoken, particularly in regard to the brutality of these and other murders, but I wish to dissociate myself entirely from some of the sentences they have uttered. Judging by some of the speeches to which we have listened, this is nothing more or lass than a camouflaged attack upon the gallant men in the Army in Ireland who are doing their best. We have heard about lack of discipline in the Army. Of all the reprisals which have taken place during the carrying out of the most arduous duties in Ireland, we are still waiting to find whether one of these unofficial reprisals has been engineered and carried out by the non-commissioned officers and men of the Army. Does that show indiscipline? I think it shows the highest state of discipline in the greatest and most severe test the British Army has ever been called upon to undergo. There is no lack of discipline there. The moral of the Army in Ireland is simply wonderful. [HON. MEMBERS: "Hear, hear!"] The hon. Member who says, "Hear, hear" a minute ago said we have lack of discipline in the Army. [Interruption.] During the speech we have just heard there has been nothing but doubt as to whether the discipline that we had in the Army during the War was still being maintained in Ireland or not. I am quoting almost his exact words. So I repudiate any idea that the discipline in the Army is not being maintained. It is. This Debate practically amounts to a Vote of want of confidence in the Commander-in-Chief in Ireland. It is attacking a man who is not here to defend himself. [HON. MEMBERS: "Oh!"] I prefer to leave it to hon. Members to decide whether I misconstrued the hon. Gentleman's statement or not. I think it is a case of save me from my friends. We have had one or two very nice platitudes expressed to-night, but I wonder what those sentiments will be thought of, and what impression they will convey when the men of the rank and file of the Army read to-morrow how their officers are not taking the ordinary safeguards which they ought to take to look after themselves in carrying out their duties. If we are to learn anything from the history of the past War, Tommy Atkins has the utmost confidence in his own officers and he is going to resent very strongly any
imputation against the character of the officers he served under in France and it ill-becomes hon. Members to say that the Army in Ireland lacks that discipline that the British Army has hitherto had.
It has been stated that precautions are not taken. We are reminded of a previous Debate when an hon. Member wanted to know if a certain regiment had marched out taking all due precaution against surprise. If hon. Members talked to officers, non-commissioned officers and men on leave from Ireland they would find out that all due military precautions are taken to guard against surprise. It is only fair to admit that the man on the spot in Ireland is a far better judge of what to do and what not to do than any Members of the House can possibly be, whether he happens to be a Noble Lord with military experience, or an ordinary civilian Member with no military experience. We have heard from the last speaker something about discipline. He is very anxious to know what is the policy of the Government, and what precautions they are going to take. I can carry my mind back to newspaper reports we used to get in the trenches about various politicians who were criticising this or that officer, who were saying that this or that move should be taken, or this or that little stunt should have been carried out. Those critics were safe in England, far away from France and the theatre of war, and they knew practically nothing about the subject. In reality I can see in the speeches we have heard to-night the old criticisms of the Army officer and the commander in France having been salvaged and served up again in perhaps more modern style.
How are you going to discriminate in respect of officers and have a different rule for the men. It is impossible. The whole thing appears to me to be absurd. We must leave these things in the hands of the men who are on the spot. There is an old military tag that the soldier must always be subservient to the statesman, the diplomat. The diplomat makes the war and the diplomat ends the war. If the military politicians of this House interfere with war, they will do their utmost towards losing the war. Do not let us interfere with or hamper the soldiers in Ireland. Let us do what we can to help them, and to make their somewhat intolerable position a little more tolerable.

Colonel ASHLEY: I do not intend to say much after the extremely able and eloquent speeches of my Noble Friend who moved the Motion and my hon. Friend who seconded it. I should like to say a few words about the speech of the hon. and gallant Member who has just addressed the House, and who has such a distinguished record as a soldier. The hon. and gallant Member has entirely misunderstood the speeches of my hon. Friends. They have raised this question not in order to criticise the soldier in Ireland, but in order to support him, not to condemn him, but to try to safeguard him from the manifold dangers which surround his path, and to try to ease the situation somewhat. All that my Noble Friend said was that in some cases in Ireland the Army orders were not carried out as strictly as they might be. That is very likely the case. I have no personal knowledge, but where you have an army composed of very young soldiers, with comparatively few old non-commissioned officers, and when most of the officers, particularly the junior ranks, are very young, you cannot expect to get the strict standard of Army discipline which you would find in His Majesty's Brigade of Guards, or in the Army during the War. Therefore, it is very likely that these Army orders were not strictly carried out. That is not a criticism of the Army as a whole; that is not saying that we wish to interfere with the soldier on the spot. It would be a thousand pities if the speech of the hon. Member (Captain Gee), who has so distinguished a military record, should go out reflecting the tone of this Debate, when the tone of the Debate is to support the soldiers in Ireland, of all ranks. I am sure that I can claim the united support of every hon. Member, of whatever party, in saying that we want to support His Majesty's Army in the difficult task they have to perform.
How can we do something to diminish the probability of officers, non-commissioned officers, and men being foully and brutally murdered in carrying out their duties in Ireland? A practical suggestion has been made that we should throw off the pretence that there is no war in Ireland, and that we should frankly face the fact that there is war, a fact which a great number of us have been proclaiming in this House for months. If you once face that fact, your task will be a heavy one, it is true, but
you will know where you are, and you can fit in your rules to meet the difficulties of the situation. On the other hand, if you are always pretending that you are at peace when you are really at war, naturally, the rules which you make do not fit in with the situation, and, as a result, we have the terrible murders which have been described. In this matter the Secretary of State for War should follow the example of the Chief Secretary for Ireland in his dealings; with what are called the Black-and-Tans, or the Auxiliaries. They are in far greater danger than His Majesty's forces. The officers and men are absolutely marked down for death if they go out alone and unattended, and even when they are in large bodies, as we read, men are murdered and maimed. They are not allowed to go out alone, and when they do go out they have to go armed. They have to remain in barracks most of the time, and the Government at last is making provision in their barracks for recreation for officers and men, so that they can get exercise and keep fit and well within their barracks and camp. They have not to go out to lawn tennis parties or to golf in order to get exercise.
I know it is not an easy task for the right hon. Gentleman, but he must face the situation in Ireland on these lines, namely, that officers, non-commissioned officers and men, especially the officers, for they are more marked down than any others, must be given ample facilities in camp or barracks for recreation and exercise. It may be unpleasant for them not to be able to go out to see their friends and to take part in the social life of the countryside, but it would be more unpleasant if they are murdered, and certainly it will be a disgrace to this country if their lives are not preserved. If the right hon. Gentleman will do something on these lines, the Debate will not have been in vain, and we shall have done something to safeguard the lives of these gallant officers non-commissioned officers and men.

Mr. LAWSON: The hon. and gallant Member for Woolwich (Captain Gee) missed the point of the Motion. I am pleased that we have an opportunity of saying, or, rather, restating what has been our point of view, and of stating our attitude towards the Army in general. I was amazed when I read of the murder of these officers, and especially of the
circumstances under which the act was perpetrated. I was one of those who were in Ireland some six months ago and the conditions there were too terrible for words. The whole thing was a creeping horror, and I understand that it has grown in intensity since that time, and for either officers or men to be walking out freely in such conditions is almost incredible. It rather points not to lack of discipline but lack of appreciation in the head command, or to something wrong in the settled policy of that command, which leads to lack of appreciation such as this kind of thing shows to exist. I am sorry that this Motion did not include the rank and file who are also in Ireland, for I said in this House after the visit which I made that the conditions under which those men were called upon to live and act and the discipline to which they had to submit, while at the same time not getting credit for the work they were doing, would have been incredible to the people of this country.
It will be remembered that in the report which some of us issued we paid our tribute to the soldier and said that he was worthy of the best traditions of the army, conducting himself according to its highest traditions. Yet he had to submit to conditions—and I believe this included the officers—which gave him very little chance to carry out his duty as he would wish to carry it out, and be effective. The situation is that there is a divided command in Ireland, and the lack of appreciation is, I think, due to the fact that the military head is not quite sure what is his function in Ireland at present. Neither is he quite sure that, if he takes any step to bring order into the country, it is going to be carried out because of the other command that is there, and apparently there is not exactly co-operation with the military head. It has been said that the conditions in Ireland are equal to war conditions. They are worse than war conditions. That is what the people in this country have been too long in realising. The enemy is everywhere and nowhere at the same time. One never knows which way he comes.

Mr. JESSON: Guerilla warfare.

Mr. LAWSON: It is guerilla warfare and something worse, because in guerilla warfare we have moving bands. You have a rough idea where they are. But
in this warfare you are not quite sure who are taking part in it. It seemed to me that the conditions were infinitely worse than ordinary war conditions. We all know during the War the fatality and futility of divided command, but there was never more need for united command than there is to-day. When one talks about discipline one implies that there is going to be strict discipline, going to be a larger appreciation of the conditions by the officer in command, going to be greater certainty as to what is his function in the country, and as to the object that he has got to achieve. And also in Ireland at the present there is need for united command in order that he may be quite sure that his function is carried out. That implies discipline, and it implies stern action with certainty as to where he is going and what is the object, but it does not imply brutality with the people like the brutality that is operating in Ireland, or like the brutality of those murders that have taken place. I appreciate what the hon. and gallant Gentleman said as to these, but there are equally brutal murders taking place against the Irish people.
I am not speaking with bias upon this matter but there are things taking place as to which it would have been better for the Government to have admitted frankly that they were ashamed of them and they should not have defended them. Equally brutal are those murders that are being dealt with here. They are of a brutal and mean kind. But you would not only be more efficient, you would not only protect the officers by a larger appreciation of the situation and by greater certainty on the part of the command, but you would protect the men, from your own point of view. I do not agree with the policy which the Government is carrying out, but if it wants to make this policy efficient, if it wants to save its own men, to cease from attacking people who are not enemies, to cease making friends into foes, to cease making Sinn Feiners, then the best thing it can do is to have a united command in Ireland and withdraw the police force from its present activities altogether. I think that would give infinitely more protection to the officers and soldiers themselves. Hon. Members may not agree with that, but that is the conclusion of one who saw the thing at its worst and
saw its effects upon all classes in Ireland, rich and poor, Nationalists, Sinn Feiners and Conservatives, who saw it at every point and came definitely to the conclusion that it would have been much better if you had treated the whole situation as a matter for the soldier from the first.
If you had taken the Sinn Feiner at his word and said there was a war, and treated it as a war, if a soldier had been able not only to appreciate and deal with the Sinn Feiner as a soldier, but to appreciate the conduct of the officer who wrote that very fine letter, then I think that you would have had more of the conditions that prevail in war and are worthy of soldiers at all times than these brutal murders in conditions such as those in which these officers were murdered, or in conditions such as those of which the Royal Irish Constabulary are very often guilty among innocent people in Ireland at the present moment. The conclusion I have come to is that it is a matter for a united command and for discipline. If you want to give protection to your own men, and the amount of protection which they deserve, you should put Ireland in charge of one man. I am certain that the Irish people themselves, in spite of all their sufferings, have a very high appreciation of the conduct of the British soldier, of the rank and file as well as of the officers. I am certain that they themselves—while they may not and will not agree with all the policy and while a considerable proportion of them believe in a separate Ireland—will appreciate and meet in a generous spirit the fact that there is a united command and that the British soldier is in charge rather than those people who have been in charge for the last year or two. In Cork, a responsible citizen talked with me on the Monday morning following the great fire. It had been arranged by General Strickland, the General in charge of Cork, that about 7 o'clock at night soldiers should be put upon the streets to perform the duties of soldiers in war time—soldiers, rather than the auxiliary forces that have been operating in Ireland. It was with a sigh of relief, and almost with tears in his eyes, that that responsible citizen said to me and to my friend that that was a very great advance and a matter for profound relief to the people of Cork.
If the Government would protect the officers and men, if they have to carry out
their present policy, if they intend to keep hold of Ireland by any means then, from their point of view, the best thing they can do is to put the country in charge of a soldier who should be head of the organisation in Ireland. They should take General Tudor and his men away out of it. Then they would not only carry out their policy more effectively, but if there is a chance of winning the favour and the good will of the Irish people, they will carry what chance there is into operation by removing these other people and leaving the matter to the soldier in charge.

Mr. JESSON: I happen to be an old soldier whose regiment was sent over to Ireland after the Burke and Cavendish murders. I very much appreciate the speech to which the House has just listened. Speaking as an old soldier, and as one who had to go through the troubles of that particular time, I would say that the House does not really appreciate the matter from the soldier's point of view. At the present time what is happening in Ireland is the worst form of guerilla warfare the world has ever known, because you may meet a man and not know whether he is your enemy or your friend. That was particularly the case about 40 years ago when I was there, only it was not so bad as at present. Exactly the same kind of tactics is going on now as then, and the only way to meet it is to place certain districts around the barracks out of bounds. That is the thing the soldier so resents because sometimes for about six months or possibly 12 months there is no trouble at all in the district. I will give you an instance of what happened to myself. We had been in a district in Ireland that was fairly quiet for a matter of about six months. One day, two or three of us were out by ourselves for a stroll into the country. We had not gone very far when we saw two or three men walking in front of us. We got a little bit suspicious, but we followed on, and later, turning behind, we found a number of men were following us. As we got out a little further into the country the whole lot of men combined together and set upon us, and we had a very rough time. The regiment to which I belonged got to hear of this particular incident. The whole regiment turned out that night, and went through that town, which had a very rough time of it, because we believed that the people there
knew something of the attack against us. The incident had a very useful effect, however, for it stopped it. All the commanding officers in the world could not have kept that regiment in check at that time, because it was a brutal, cowardly attack made upon innocent men carrying out their duties.
That is the kind of thing that is going on all the time. You do not know who is your enemy or your friend. The man whom you think is your friend one day is the person who next day you find taking part in an ambush, or something of that kind. In regard to that, I want to say that it is of no use for us to theorise in this House. I agree with my Noble Friend (Earl Winterton) that it is upon these troops in Ireland and those responsible for maintaining order that you have to rely. You cannot tell them what they have to do better than they know; it is for them to decide what the best course is. I am satisfied, in regard to those brutal murders that took place the other day, that it was a case of men feeling the restrictions put on them, and that they were cramped and confined. The difficulty is that the men want their liberty and freedom. After all, the Tommy has got a rather partial regard for the ladies. Do not make any mistake, that is one of the chief problems. If a soldier, even in my day, were seen walking out with one of the Irish girls, then he was in for a very festive time, and so was the girl. That is the same kind of thing that is going on now. After all, human nature is human nature, and we all like to do the best we can to enjoy ourselves. What I want to point out is this: You are thrown off your guard from the mere fact that a certain district is quiet for six months, or possibly 12 months, and then, all at once, you get one of these brutal, cowardly attacks. The only thing that this House can do is to leave the matter entirely in the hands of those in Ireland who know-all about the circumstances.

Mr. RONALD McNEILL: The speeches of my hon. Friend (Mr. Jesson) and that of the hon. Member who preceded him (Mr. Lawson) were very interesting. I was to a very large extent in agreement with them, but it struck me that both of them travelled a good deal wider than the actual Motion with which my hon. Friend (Earl Winterton) moved the
Adjournment. That Motion is really confined within very narrow limits indeed. I do not think it necessary to say that I am most warmly in sympathy with the spirit that animated my Noble Friend to ask leave to move the Adjournment. All the House is in agreement with him in that. After all, what moved him to ask for this Debate was the indignation, which he expressed so eloquently, and which the whole House feels, at the brutality of the murders of these particular gallant officers. In. another respect I do not believe there is any difference of opinion. I am perfectly certain that every hon. Member agrees with my Noble Friend in desiring that every possible precaution should be taken to protect these lives. While to that extent I am absoluely in agreement with my Noble Friend, I am a little puzzled by the procedure he has adopted, because a Motion for the Adjournment of the House is rather a peculiar part of our proceedings. My Noble Friend put a question at Question Time to the Secretary of State, and it was because the Secretary of State's answer was not satisfactory that he asked for and; obtained leave to move the Adjournment of the House. Under these circumstances it amounts to a vote of want of confidence in the right hon. Gentleman or of censure upon the Government, but really, as this Debate has been developed, it is a vote of want of confidence in the Commander-in-Chief.

Earl WINTERTON: It is very important that I should make my position clear. What I endeavoured to do was to draw attention to the conditions in Ireland and to demand that the ways of whoever is responsible for that state of affairs, whether the Government or the Commander-in-Chief, should be amended.

Mr. R. McNEILL: That is so, but may I remind my Noble Friend that he said it was a very feeble thing for the Secretary for War to say that he had confidence in the Commander-in-Chief. If it was a very feeble thing for the Secretary of State to say that, I can hardly imagine a more emphatic way of expressing one's own want of confidence in the Commander-in-Chief. My Noble Friend is a military man with military experience, but comparatively few of us in this House have that advantage. We have heard a great deal of what happened during the War. We have been told that there is
war going on in Ireland now. With that I agree. I took part in many of the proceedings in this House during the War, being unfortunately not able to have the honour of serving elsewhere, and I remember that one of the things many of us were most strongly insistent upon was that there was to be no interference by the politician with the soldier. I do not remember whether my Noble Friend during the time he was not serving overseas took part in the Committees when that principle was insisted upon, but I am certain that my right hon. Friend the Member for the City of London (Sir F. Banbury) will bear out my statement, because he was a member of the Unionist War Committee which very often was concerned with the allegations then being made that interference with the Command in the different theatres of War was coming from the politician. We always objected to that. It was one of the commonest criticisms. I should have thought that it was a criticism on which all soldiers are agreed. Is the right hon. Baronet prepared to say that his judgment is to decide whether the Commander-in-Chief is incompetent or not? I should demur very much to his making any such claim. I certainly should not make it for myself. I am quite sure my right hon. Friend would not do it.
I do not feel competent to decide whether a distinguished General is or is not a competent Commander-in-Chief in Ireland, and I want to know whether there are many Members of this House who feel that they are competent to do so. Unless they are competent to do so, I cannot imagine how they can support my Noble Friend in thinking it feeble of the Secretary of State to place confidence in the Commander-in-Chief. Surely we ought to go further. If my Noble Friend and those who support him agree that results prove that the Commander-in-Chief is incompetent—it may be so; I am not in a position to deny or to assert it—surely this is not the right way to set to work in order to get rid of him. I cannot think that a Motion for the Adjournment of the House is quite the right way for the House to come deliberately to the decision that the Commander-in-Chief must be removed. That is really what my Noble Friend is asking the House to do. I think that the Secretary of State, so far from being feeble, as has been stated, is perfectly right.
The time may come when the Government in its responsibility may think it right to remove the Commanding Officer, but unless there are very much stronger reasons given and infinitely more information is at our disposal than we have tonight, my right hon. Friend is doing only what every Secretary of State is bound to do, namely, showing confidence in the man who is carrying out a most difficult commission, until it has been proved to absolute demonstration that he was so incompetent that he ought to be directly removed. While I am absolutely in sympathy with my Noble Friend in all the indignation he feels at the transactions which have occurred and am just as anxious as he can be that every step should be taken to discipline the forces and to minimise as far as possible the terrible occurrences which are going on, I do not feel that I am at all competent to say that the Commander-in-Chief, who has the trust of the Government, ought to be removed, or that it is likely to be done in any better way than the way in which he is trying to do it.

Lieut.-Commander KENWORTHY: I think the last speaker was only in a degree less fair to the Noble Lord than the hon. and gallant Member for Woolwich (Captain Gee). I am sure that the Noble Lord and his friends in moving the Adjournment were really trying to draw attention to the fact that proper precautions are not taken to guard the officers at recreation in Ireland. To endeavour to prove that the Noble Lord was using this Motion as a means of getting rid of the Commander-in-Chief is doing the Noble Lord too much honour. I have every sympathy with those who wish to guard the lives of the officers. I think the hon. Member for Canterbury (Mr. R. McNeill) is making too much of the Motion. I can understand the respect for his late comrades shown by the hon. and gallant Member for Woolwich, but he also seemed to mistake the intentions of the Noble Lord. At the same time I am quite convinced that the Noble Lord will not be satisfied with the administration of Ireland until he is Chief of the Auxiliary Division and the hon. Member for Bury St. Edmunds (Lieut.-Colonel Guinness) is Commander-in-Chief of the Forces. Then, of course, things will go right, but until then everything will go wrong. I want to address myself to the question of the murders, and I want to
say in the most emphatic terms I can, that recent events and the murders of these military officers in plain clothes have shocked me utterly. It is a new departure. Up to now I gather that on the whole the relations between the military and the civil population have been good, and that, generally speaking, the conduct of the officers of the Army and of non-commissioned officers and men have been humane and restrained under the most trying and most aggravating circumstances. It must be said there were certain exceptions, and we were quite within our rights in drawing attention to them in this House. Attacking an armoured car or a lorry filled with armed men in the open country is a different thing to shooting unsuspecting men who are playing tennis or golf. I have condemned ambushes of the forces of the Crown. I have always said the Sinn Fein movement made a great mistake after the Armistice in embarking on violence, but when they go further and carry out what I believe to be private ventures in certain cases, against men who are only taking their relaxation, then I think it is infinitely worse. The case quoted by the Noble Lord (Earl Winterton) of the man who was killed while driving a motor-car with some ladies is a shocking one, if the newspaper report is true, which we cannot altogether be certain of, because the Government propaganda is not always accurate. If it is true, however, that this man was shot and wounded, put into the car again and taken into the mountains and murdered, then it is cruel and dastardly to the last degree. On the 15th December last a case of that kind occurred on the other side. I do not want to enter into the details of it, but it was a case in which a man named John O'Connor was wounded first and then followed up and killed, and I condemned that in the strongest possible language. I condemn just as strongly the case quoted by the Noble Lord if the facts are as stated. At the same time, without wishing to criticise the military in Ireland themselves, I do think it is reckless and ill-advised that they should be conducting themselves in any part of Ireland just as they would in England, attending tennis parties, playing golf, and going in for the ordinary social life.

Mr. JESSON: They are only human

Lieut.-Commander KENWORTHY: The hon. Gentleman says they are only human. I prefaced my remark by saying I was not criticising the military themselves. What I am criticising is the absence of definite orders to these officers and men that they must consider themselves on active service, not only in their treatment of the civilian population, but in regard to the ordering of their own lives. Not only should martial law be made a means of bringing extreme pressure to bear on the civilian population, but it should also be extended to the people who are exercising it, and they should take precautions to prevent attacks being made upon them. Only a little time ago private soldiers could be seen in Irish towns and villages walking with the girls, while their officers were hunting in districts in the South and West, including the martial-law areas. In many parts of Ireland the relations between the civilian population and the Crown forces until lately was on the whole good, just as it was when I was stationed in Ireland before the War. The relations then were excellent; there was never any sort of trouble between the civil population and the military or naval forces. But the conditions have changed, and the vendetta against the political police, I regret to say, has been extended to the Army. It is no good mincing words. Of course, there is a state of war in Ireland, and it is ridiculous not to issue regulations forbidding this reckless indulgence in sport and social functions, where the persons concerned are open to attack and in some cases are quite unarmed. If they want recreation let them be given leave to England.
I have here a very interesting publication which I get about twice a week, named the "Irish Bulletin," which is the sub rosa organ of the Sinn Fein movement. I have looked out No. 92, Volume 4, in anticipation of this Debate, and I recommend it to the attention of the Attorney-General for Ireland, who can easily put his hands on it. Several Members of this House get it. It is sent to me quite anonymously. I do not know who it comes from. [HON. MEMBERS: "Hear, hear!"] I know what hon. Members mean, but I assure them the Government have been trying to suppress this paper for long enough, and they cannot find out where it comes from and neither can I. This particular number deals with attacks on officers and
the deaths of certain ladies. Hon. Members may be surprised to hear that the deaths of these ladies are deplored, but they say, and I think with some justice, that these officers were liable to attack. I do not sympathise with the writer of these notes at all, but I am only quoting this to show their point of view. They say that these officers who are liable to be attacked should not be accompanied by ladies, and that if that had not happened in one case a particular mistake would not have occurred.

Sir J. BUTCHER: It is murder.

Lieut.-Commander KENWORTHY: Of course it is murder, and I condemn it wholeheartedly. But I am giving the point of view expressed by the Irish Republican Army themselves, and I must say, from their point of view, it is not altogether unjustified. [HON. MEMBERS: "Oh, oh!"]

Sir J. BUTCHER: You are justifying murder.

Lieut.-Commander KENWORTHY: I am not justifying murder. If there is a state of war in Ireland, and if warlike weapons are to be used, then if officers off duty are to go about unprotected and unarmed to social functions, they are asking for trouble.

Colonel ASHLEY: May I ask the hon. Gentleman, does he justify the shooting of an officer, then taking him up to the mountains and murdering him?

Lieut.-Commander KENWORTHY: If the hon. and gallant Member had listened to me he would know that I particularly referred to that case. I attempted in my poor language to express my unutterable loathing for that particular crime, and of all these shootings of unarmed officers, unsuspectingly engaged in sport and social functions. I believe I am on equal terms with those who have brought forward this Motion so far as that is concerned. My point is that there is a state of war in Ireland, and that regulations should be made prohibiting these relaxations in enemy country—because that is what it is, and do not let us disguise the fact from ourselves. You may put as many troops you like into the country, but as long as officers Are allowed to sleep out of barracks in private lodgings and go about in plain clothes and unarmed they will, I regret to say,
be in danger. I am afraid these murders will continue unless the regulations are stiffened up, and no one will deplore it more than myself, because it makes our task of bringing about a change of policy more difficult, apart from the sympathy we feel for the relatives of the murdered men. There is another way in which these murders can be stopped, and that would be by taking the military off political work. If the military in Ireland had never been put to suppress a national movement they would never have raised this hatred against them or against certain members in certain districts. I believe this apparently new departure of assassinating officers unarmed is confined to certain districts. I say, take the military off political work. Let them garrison the country, and be prepared to defend it against a foreign aggressor, or, as far as that goes, to carry out the ordinary functions of troops in England. You have tried, by using the forces of the Crown, to suppress a national movement. Things have got worse and worse, and now we have this culminating point, when even the officers of the army of occupation are unable to go about their ordinary pleasures when they are on leave or off duty, and Heaven knows what will happen next! I suppose this will spread, and there will be reprisals, and then we will have some even greater barbarity than we have ever had. Eighteen months ago no one would have believed it possible for officers to be murdered on the golf links. What will happen 18 months hence Heaven only knows if the present policy continues.

Mr. ORMSBY-GORE: Would you surrender?

Mr. SPEAKER: This is getting far beyond the limits of the Motion. One would never be able to allow these Adjournment Motions unless debate were confined to the specific points raised.

Lieut.-Commander KENWORTHY: I hope I shall not get out of Order. I think if the troops were confined to their ordinary work as soldiers in Ireland they would be very much safer in that country. Let them exercise and so on and get their recreation in barracks, as suggested, and give them more frequent leave to this country. Hon. Members on the other side say reprisals will stop when murders stop. I believe that if the reprisals stop, the murders will stop. In
other words, I still believe that the most practicable suggestion to-day to get rid of this hideous situation is to have a truce all round.

Mr. ORMSBY-GORE: To return to the actual point raised by my Noble Friend (Earl Winterton), I would like more particularly to refer to the speech of the hon. Member for Canterbury (Mr. B. McNeill), and to say that this Motion to-night is not in any sense a vote of want of confidence in the Commander-in-Chief. The hon. Member for Canterbury tried to draw an analogy between the position of the Commander-in-Chief in Ireland and the position of the Commander-in-Chief in France or Egypt or the Dardanelles during the War. The position is absolutely different. The Commander-in-Chief in Ireland is not in the same position as the Commander-in-Chief in France or any other theatre of war. It is true he is in somewhat the same position in the martial law area. But these murders we are considering did not take place in the martial law area; they took place outside the martial law area, where the power and responsibility of the Commander-in-Chief is very small indeed, and where the main provision for the protection of the officers and the troops still rests with the civil authorities. That is the point that should be borne in mind. The Commander-in-Chief in Ireland has not got a free hand. The particular point I wish to emphasise is the inadequate intelligence system in Ireland for giving warning to officers and parties of officers that an ambush is being prepared for them and that they are in immediate danger. At the present moment you have a dual system of intelligence; you have a system of intelligence organised by the civil authorities centred in Dublin Castle, maintained by special civilian channels and by the police, and you have at the same time a military system of intelligence organised under the Commander-in-Chief. The two are not co-ordinated, and the military and particularly these parties of officers are not informed and are not in touch with the intelligence obtained through the police channels. I am perfectly certain that until you have not only one Commander-in-Chief in command of all the forces of the Crown in Ireland, but you have one system of intelligence immediately under the Commander-in-Chief, and all the officers and military forces
in Ireland closely informed of what that intelligence can provide, you will have lamentable incidents of this kind. They are, to my mind, the result of the breakdown of your intelligence service in Ireland, for which breakdown it is not the Commander-in-Chief who is responsible but Dublin Castle, the old rotten machinery of Dublin Castle.
10.0 P.M
Another thing is, it is absolutely essential, in view of what is going on in Ireland to-day, in view of what the hon. Member who has just sat down said, that these murders of British officers are on the increase and are a notable feature of the intensification of the Sinn Fein armed campaign in Ireland, that new steps must be taken to meet them. One hears on all hands from Ireland—all the information I get from my own home in Ireland—is to the effect that the armed forces of Sinn Fein are steadily increasing. For every Sinn Feiner you had this time last year you have ten armed Sinn Feiners this year, and arms are coming in through Donegal and the west coast of Ireland, where they are being landed in boats and distributed. The military problem you have to face in Ireland is daily becoming more serious. You will require more troops, and you will require more precautions. I listened in another place tonight to a remarkable speech by the Lord Chancellor, and he said, with reference to the events in Ireland, "It is not 'a kind of war' but a war." Let us have it from the Government it is a war. If it is a condition of war, then I do urge that the whole situation in the South and West of Ireland should be handed over to the General Staff, handed over not merely to the General Staff in Ireland because the General Staff there is small; Sir Nevil Macready has only a limited number of staff officers at his command. But if you are to have any settlement in Ireland, if you are to get any peace there, you have to conduct in the next few months a more efficient military campaign in Ireland, and the only way to do that is to ensure that your officers are adequately protected. Adequate protection of your officers against this intensified campaign of murder by armed Sinn Feiners is the first step to the restoration of peace, order, and civil government in Ireland, and therefore we bring this forward to-night, not in a spirit of hostility or of criticism of the Commander-in-Chief or any indi-
vidual officer, not as an attack on the discipline of the forces of the Crown in Ireland or anything of that kind, but really with a. desire to impress upon the Government that, as this terror in Ireland is getting more fierce, they have got to take more efficient, more energetic, more adequate steps to meet it; and we do impress upon the Treasury Bench, exercised as they are with many other matters, that the matter of the condition of Ireland to-day demands much greater attention than it has received from them in the recent past.

Mr. MYERS: When we read in the newspapers or hear in this House the record of these murders we cannot but be filled with repugnance and loathing at the brutality displayed, and our better nature goes out in full sympathy towards the relatives of those who have lost their lives. But there is one fact which is rather startling, and it is that one of these officers who has lost his life is reported to be 20 years of age. It appears to me that an officer, inexperienced as he must be at that time of life, has no right to be in Ireland, having regard to the existing order of things. The probabilities are that, if the indiscretions which we have heard have been committed by the military forces were investigated, it might be found some of them were due to the fact that we have too young and inexperienced officers carrying out too delicate operations. [HON. MEMBERS: "No, no!"] We have listened with as much toleration and respect as is possible to Members on the other side discussing a very delicate matter, and I suggest we are entitled to the same consideration. It is a remarkable coincidence, but if the records are consulted it will be found that 12 months ago this very night the hon. and gallant Member for the Fylde Division (Colonel Ashley), who has spoken in this Debate, was discussing a demand for strengthening and intensifying the military operations in Ireland. As we look over the records of what has taken place in Ireland during the 12 months, we are entitled to ask whether the policy asked for on that occasion has been justified.

Mr. SPEAKER: The hon. Member must ask that on some other occasion, not to-night. We are strictly limited, by the terms of the Resolution, to deal with the case of those officers who were murdered within the last five days.

Mr. MYERS: I apologise for encroaching. When the hon. and gallant Member, who moved the Adjournment, was describing these incidents to the House, he endeavoured to depict the protection that an officer was given when on his way to the boat to cross to England. He showed the House how soldiers went in front with their rifles held out.

Earl WINTERTON: Not the soldiers. That was the whole point. They were the Auxiliaries, the so-called Black-and-Tans, whom I am proud to support in this House.

Mr. MYERS: When the officer was walking down the quay, those individuals, who were giving him the necessary protection stood with outstretched hands and with revolvers therein. That is an indication of the terrible pass things have come to in Ireland. Running through the speeches of hon. Gentlemen opposite is the suggestion that the remedy is to be found in strengthening military operations in Ireland. That is exactly the same thing that the hon. and gallant Member for Fylde urged a year ago. If the Government think, they can win through in Ireland by a policy of force, they ought to make that declaration.

Mr. SPEAKER: Once again, I must remind the hon. Member and the House that this is quite irrelevant to the present Motion, which deals only with the definite and urgent matter to which it refers.

Mr. MYERS: If the Government think they can preserve the lives of their officers in Ireland by a policy of force the Government ought to make that declaration and not go on the lines of half measures, as they seem, to be doing. If they believe it cannot be done by a policy of that kind it is equally up to them to declare in the opposite direction. What I rose specifically to say I am going to say now. I do not agree with the line of argument pursued by my hon. Friend the Member for Chester-le-Street (Mr. Lawson). The Labour party are of opinion, and have expressed it publicly, and I believe I am expressing their point of view now, that we are not going to remedy these things which have been presented to us upon this Motion by any military methods whatever. We shall not succeed in securing the protection of our officers by military operations. We do
not believe in mending the military regime in that country, but in ending the military regime, and if we want to protect our officers and to work in the direction of peace all round in Ireland it has not got to be militarism and violence but statesmanship and conciliation.

Sir F. BANBURYS: The hon. Gentleman who has just sat down said he thought one of the reasons for these sad events was the fact that officers of 20 were employed. May I remind him that trades unions consider boys of 18 entitled to a man's wages and competent to do a man's work. If a trades unionist of 18 is entitled to a man's wages, an officer of 20 is entitled to do his duty as an officer in His Majesty's forces. I am glad my hon. Friend the Member for Canterbury (Mr. R. McNeil) is in his place. He was quite right when he said that he and I in the days of the War used to say we did not wish for any civil interference with our commanders abroad, but we did not get that. There was plenty of interference. However that may be, let me point out that never in the history of this country has it been held that if a campaign is unsuccessful we are not to say we must have either a change of Government or a change of commanders. He is an historian. Let me remind him of what took place in the early days of the Peninsular War. The general in command made a mess of the matter and was recalled. Sir Arthur Wellesley was sent out, and things changed at once. I understand from my Noble Friend that while he did not in any way cast any imputations upon the officer in command he did say that these things were recurring with startling rapidity and that something ought to be done to stop them. That was the point. On this side of the House Members have sat quiet for the last 8 or 10 months. They have listened to attacks upon the Government by the other side and upon the forces of the Crown, and they have without exception supported the forces of the Crown and the Government. Not a word has been said until to-night against the fearful results which have attended, as I think, the fatal policy of the Government in their conduct of the forces in Ireland. We cannot sit still much longer. We cannot come down every morning to breakfast and, opening the news-sheets, the "Times" or whatever the paper be, and read:
"Yesterday Captain So-and-So and Mrs. So-and-So were shot at: One was killed and the other was wounded." "Two constables were murdered somewhere else," and "Three soldiers or three Black and Tans were attacked and wounded at another place." Every day this sort of thing is occurring. It cannot go on. It is not for me—I am not sitting on the Front Bench—to say what ought to be done, but something should be done.

Sir W. DAVISON: Must be done.

Sir F. BANBURY: As my hon. and gallant Friend says something must be done.

Sir W. DAVISON: And if the present men cannot do it, somebody else can!

Sir F. BANBURY: If it is impossible for the Government to restore order in Ireland, well, then, they had better get out and let somebody else go in and do it. We have been told in the various Debates for months that the situation is well in hand.

Mr. SPEAKER: I would remind the right hon. Baronet, as I have just reminded another hon. Member, that this is not the occasion for a general debate on State policy. The Debate is strictly limited to the subject-matter on which the Motion for Adjournment was allowed, namely, the incidents that have happened in the last few days.

Sir F. BANBURY: The hon. Gentleman opposite (Mr. Myers) went back a year. I am only going back a short time.

Mr. SPEAKER: The hon. Gentleman was going back a year, but I stopped him.

Sir F. BANBURY: Very well, Sir, I will not go back even a fortnight. But that does not in any way interfere with the point of my observation, and as you know, I have no desire to be out of order. My point, in fact, I have made, and I will sit down by saying that the country and this House demands that the Government shall take some step to put a stop to the outrages which are now going on in Ireland.

Lord ROBERT CECIL: I do not propose to detain the House, as hon. Members desire to hear the Secretary for
War much more than they wish to hear me. The Motion which we are considering calls attention to the failure of the Government to take effective steps to secure the safety of the officers in Ireland when off duty. I am saying nothing new to what I have always said in these discussions when I express my sympathy with the officers and men of His Majesty's Army who are carrying out their duties under enormous difficulties in Ireland and are exposed to very grave dangers, and though I am no judge of these things they must, I imagine, be even more nerve racking than active service in a regular war. I was interested in this Debate to find the Noble Lord opposite (Earl Winterton) make a speech in which he began most temperately, expressing himself as desirous to say nothing which could be otherwise than helpful to the soldiers in Ireland, but which nevertheless exposed him to the animadversion of another hon. Member as having attacked the Army in Ireland. Perhaps that will make him a little more chary in some of the observations he has directed against the Members on this side of the House. On this question I have no right to speak for anybody but myself. I have never attacked His Majesty's forces in Ireland, although I have attacked the Government when I thought they were wrong and I am prepared to do so again. I have never attacked our forces in Ireland because I have always believed that they were carrying out the orders of the Government. This is a serious matter. The actual crimes we are considering are those which occurred within the last five days, but it has been well said that they are by no means the first of their nature and that the Government have had full warning of what may be expected and of the necessity for taking steps to deal with this particular aspect of this Irish difficulty.
It would be out of order for me to refer to previous events after the Ruling which has been given, but it is well within the recollection of hon. Members how many of these occurrences have taken place, and it is deplorable that, so far from diminishing, they appear to be increasing, and the disgrace which they bring upon the British Empire and the British name is a matter which I am satisfied will some day or another excite the earnest attention of the people of this country. The Motion criticises the Government for not having
taken any effective steps. I cannot help feeling that in dealing with the lives of our officers in Ireland the real and essential thing for the Government to do is to make up its mind quite definitely whether we are dealing with a state of war or a state of peace marred and blotted by serious crimes.
Either hypothesis is conceivable, but unless the Government make up their minds which aspect or diagnosis of the Irish disease they are dealing with, they cannot hope to succeed. Is it a state of peace with terrible crimes being committed? Some 15 months ago I stated that I thought that that was the proper way in which the matter should be dealt with, but now, dealing with the actual events we are considering to-day, I doubt whether that hypothesis can any longer be sustained. If that is the case, almost everything you are doing is wrong. Instead of treating this question from a military point of view, with military courts and military precautions, you should aim at enforcing the civil law, with the guarantees which civil justice requires, only they should be more forcibly and effectively enforced than has hitherto been the case.

Mr. R. McNEILL: May I just state that the Lord Chancellor has to-day very definitely stated that it is a state of war.

Lord R. CECIL: That saves me from the trouble of developing that aspect of the case, and if that is so, other steps ought to be taken immediately. The first thing to do is to have unity of control. If you are going to deal with this question as a military matter it is absurd to leave it in such a way that we do not know who is in control in Ireland. As a matter of fact, I do not know whether the Chief Secretary still exists in Ireland, and when the Irish Act comes into force I fancy he disappears like a snark. Then there is Lord FitzAlan. I believe every Member of the House of Commons, to whatever party he belongs, has a great personal affection for Lord FitzAlan and an immense admiration for his courage in undertaking an absolutely thankless duty under circumstances with which we are all acquainted. He is entitled, indeed, to our highest admiration. I am glad to see the Leader of the House here, because it enables me to ask what is the position of Lord FitzAlan in regard to the South and West of Ireland.

Mr. SPEAKER: The Noble Lord has been here during a considerable portion of the Debate, and he must know that he is travelling very far from the terms of the Motion.

Lord R. CECIL: I will, of course, bow to your intimation, as I hope I always do to any intimation from the Chair. My excuse is that is seems to be difficult to discuss what effective steps can be taken unless we are permitted to deal with the organisation of the Government in Ireland.

Mr. SPEAKER: The Noble Lord has, of course, read the Motion which is before the House, and knows that it deals with the measures taken for the safety of officers of His Majesty's Army in Ireland when on duty, and the necessity for their protection, as shown by five recent murders. It was only that particular reference which justified me in allowing the Motion to be put.

Lord R. CECIL: I am merely asking for guidance. Is it not in order to say that the Government are failing to take effective steps to protect these officers, unless they clear up the conditions of organisation of the Government in Ireland? I feel that that really lies at the very root of the considerations which have brought about these horrible murders. Unless we are permitted to ask the Government on this Motion what effective steps they are taking to protect the officers from such dangers as are indicated in the Motion, it is almost impossible, I submit with the greatest respect, to make this Debate fruitful of any results. If we are merely to criticise what has been done in these cases, if we are merely to ask why were the officers not guarded, surely we are not going to get at the root of the matter, which is the failure of the organisation of the Government.

Mr. SPEAKER: The rule under which we are working to-night lays it down that the discussion must be confined to the specific matter embodied in the terms of the Motion, and I cannot therefore permit the Debate to go outside them. Otherwise, I should be debarred from allowing such Motions.

Lord R. CECIL: Of course I shall adhere entirely to what you have been good enough to say, and it will have the fortunate result that it will enable me to
curtail my observations to a great extent. [HON. MEMBERS: "Hear, hear!"] I am quite aware that hon. Members opposite regard any criticism of the Government as in the nature of blasphemy. When they criticise the Government they make the most humble apologies, as though they were doing something reprehensible. Whatever steps may be taken to protect the officers of the Army in the discharge of their duty, I earnestly trust that the Government will consider that we are now, according to the Lord Chancellor, in a state of war, and that, therefore, the rules which prevail in time of peace are no longer applicable. If you are going on with that policy at all, you must treat Ireland as being in a state of war. You must recognise that the whole of your policy has absolutely broken down, that you are now faced with war, and that you must treat your officers as being strictly on active service, not allowing them to go anywhere without guards, protection, and arms; and you must justify that state of things as best you can to an indignant country.

The SECRETARY of STATE for WAR (Sir Laming Worthington-Evans): The Noble Lord will forgive me if I do not follow him in his last observations. If I did, I fear that I should trespass outside the ground covered by your ruling. This evening there has been manifested, and I gratefully recognise it, in the great majority of the speeches, a desire to say nothing which would be hurtful to the officers and the troops in Ireland, and, on the contrary, to suggest things which would be useful for their better protection. There is only one observation that I have to make which is not quite in accord with that general statement, and that arises from the speech of my Noble Friend the Member for Horsham (Earl Winterton). I am not quite sure that I understood him correctly. I am not quite sure whether he meant to say that he had lost confidence in the General Officer Commanding-in-Chief in Ireland, because my hon. Friend the Member for Stafford (Mr. Ormsby-Gore), who spoke later, interpreted the Noble Lord, and said that he did not mean that he had lost confidence or that this Motion was to be treated as a vote of confidence in the General Officer Commanding-in-Chief in Ireland. I want to give my Noble Friend the opportunity of clearing
that up, because he did immediately afterwards mention the names of certain General Officers who, he said, might be possible successors of the present General Officer Commanding-in-Chief in Ireland. If it is left there, I am afraid that inferences will be drawn from his speech which I am not at all sure that he intended to express.

Earl WINTERTON: I am very much obliged to my right hon. Friend, and I appreciate his courtesy in giving me the opportunity of clearing up the point to which he has referred. I am afraid that my reference was not very happy. What I intended to convey was, not that I, nor, so far as I know, anyone else, had lost confidence in the Commander-in-Chief in Ireland, but that the Commander-in-Chief, my right hon. Friend, and everyone else connected with the matter must be judged by results, and that a time limit must be set for anyone carrying out the only policy that seems to be possible for restoring order in Ireland.

Sir L. WORTHINGTON-EVANS: I am extremely glad that my Noble Friend has said that. Of course the Government, its ministers, and soldiers alike, must be judged by results. I make no complaint whatever of that. What I wanted to clear up was the possibility of its being thought that a premature judgment had been formed, and that an injustice was being done to the General Officer Commanding-in-Chief. Let me now, confining myself to the Motion, examine what steps have been taken, and what steps can be taken, effectively to protect the officers in Ireland from the brutal murders which are planned and carried out against them. My Noble Friend suggested that a general regulation should be made providing that officers should either go out in pairs or should be under some sort of escort, and other speakers have suggested that a prohibition should be made against their taking part in any games—tennis or golf—and that they should generally be confined—because that is what it amounts to—to barracks or to quarters, and of course the same treatment must be meted out to non-commissioned officers and men. I am asked to make such a regulation as that. But the conditions in Ireland differ from place to place and from time to time, and it would be an absurdity if the Secretary of State intervened and made a general regulation like that applicable at all
times and in all places in Ireland. It would be depriving the officers and men of such little liberty as they are able to snatch from their duties.

Major-General Sir J. MOORE: Is it a state of war? It all depends on that.

Sir L. WORTHINGTON-EVANS: The Secretary of State for War during war does not make such regulations as that. He trusts the General Officer Commanding-in-Chief to make any regulations that he may think is necessary. Under the General Officer Commanding-in-Chief there are four Divisional Generals in Ireland. They have power now to make any such regulations if they think it is necessary at the time or in that particular place in which officers and men are stationed. It was suggested that I am hiding myself behind the General Officer Commanding-in-Chief. I am quite prepared to take my whole share of responsibility. I have no desire to hide myself behind anyone, but I have no intention of thrusting myself on the top of officers in whom I have confidence when they have power to make regulations if they think they ought to be made. In some parts of Ireland it would be, no doubt, absolutely necessary to confine officers and men to their quarters, and in such cases it is done, but there are other places where a certain amount of liberty is taken. Deplorable as these five cases are, we must not lose all sense of perspective. We must remember that they are five out of a very great number of officers stationed in Ireland. Deplorable as they are, they are not so very numerous as to call for such a restriction of liberty in all cases. My Noble Friend also said he had a suspicion that rigid discipline was not enforced. It would have been much more useful if he could have given any instance whatever of discipline not having been enforced. He misled the hon. and gallant Gentleman the Member for Woolwich (Captain Gee), who thought the Noble Lord was accusing the troops of want of discipline. I do not think he meant that. I think he meant that in certain cases some Regulations which he thought had been passed had not been carried out.

Earl WINTERTON: I will tell the right hon. Baronet privately. It would not be in the public interest to give him particulars.

Sir L. WORTHINGTON-EVANS: If the Noble Lord will give me that I will call the attention of the General Officer Commanding-in-Chief to it, and will have whatever inquiry ought to be made into it made so that the example of that case may be a warning to others and also help to avoid any ill consequences in the future. The Noble Lord suggested that my answer to not giving escorts to officers who were off duty might be that there were not enough troops. Of course, there are not enough troops to form escorts for all officers off duty. The troops are very fully employed under conditions far worse than war. In war there is a back area in which there can be some rest. In Ireland there is no rest, no safety, no security, and in these conditions are troops to be asked, in addition to their other duties, which frequently keep them out of bed four or five nights a week, to form escorts for officers off duty? The only effect of such an order would be to confine the officers to barracks, because they would not be able to go out, not having troops for escort. The Noble Lord said: "Send more troops." We intend to send more troops. Extra battalions went last week, and more battalions are going as quickly as they can. It is necessary that the officers and men in Ireland who are doing a duty which must be distasteful to them, besides dangerous, should be supported with the full might of England. More troops, all the troops that are available shall be sent to their support.
I am not sure whether I should be in order in dealing with the question of unity of command. Perhaps it is in order, because the hon. Member for Chester-le-Street (Mr. Lawson) suggested that we should take the Irish at their own word, and that as they say they are at war, we should treat them as though they were at war, put a British soldier in charge of the administration, and rule the country in a military manner.

Mr. LAWSON: Yes, but I said also that you should take General Tudor and the Black and Tans out of Ireland.

Sir L. WORTHINGTON-EVANS: It was not necessary for my purpose to repeat that.

Mr. LAWSON: It was for mine.

Sir L. WORTHINGTON-EVANS: I do not want to misrepresent the hon.
Member. I am glad he interpolated that remark. What it amounts to is an extension of martial law. Unity of command means that the soldiers and the police should be under one command. That means, extend martial law in Ireland. I cannot discuss that to-night. I should be out of order if I discussed it at any length, but I can tell the House that it is one of the matters which is being considered, and if that is necessary for the purpose of giving proper support to the troops I hope it will be carried out. In the South and West the sands are running out; but the time has not yet passed when the South and West can form their own Parliament. If ever at the last hour they form their own Government, such further consideration on that point would not be necessary. I am grateful to the House for the tone of the speeches. I am glad to have an opportunity of telling the House that it is the intention of the Government to do everything in their power to protect the lives of the officers, non-commissioned officers, and men who are doing service in Ireland. If I am not able to accept the suggestions made by the Noble Lord, it is because I do not believe they are practicable in the circumstances. The practicable course is to increase the number of troops, and, if necessary, extend the area of martial law in Ireland.

Earl WINTERTON: In view of what has been said, I beg leave to withdraw my Motion.

Motion, by leave, withdrawn.

FINANCE BILL.

Again considered in Committee.

[Mr. JAMES HOPE in the Chair.]

NEW CLAUSE.—(Amendment of 10 and 11 Geo. V., c. 18, s. 23.)

Section twenty-three of the Finance Act, 1920 (which provides for a reduced rate of Income Tax on the first £225 of taxable income), shall have effect as if there were added the following—
The rate on which the next £200 of the taxable income of an individual shall he charged to Income tax shall be two-thirds of the standard rate of tax, and the rate on which the next following £200 of the taxable income of an individual shall be charged to Income Tax shall be five-sixths of the standard rate of tax."—[Mr. Hartshorn.]

Brought up, and read the First time.

Mr. HARTSHORN: I beg to move "That the Clause be read a second time."
The object of this Clause is that a graduated scale may apply and that instead of the 6s. in the pound coming into operation after the first £225, the 3s. operating up to that average, four shillings should apply to the next £200, five shillings to the next £200, and six shillings on higher figures. Before the War all incomes below £160 were exempt from Income Tax. If to-day we assume the cost of living to be 100 per cent, above pre-War, or the purchasing power of money to be half what it was in pre-War days, it would require at least £320 income to enable a married couple to live the same standard of living as was regarded as a model-ate standard of living on which they were free from Income Tax in pre-War days. Instead of being relieved to the extent of £320, the abatement to-day is only £225, which, in effect, means that the Income Tax operates at a much lower figure than it did in pre-War days. During the War Amendments were made which gave additional relief to married people by making an allowance on behalf of the wife. Before the War the £160 applied to the single man as well as to the married man, but as part of the scheme to which the Chancellor of the Exchequer referred this evening, which was propounded by the Royal Commission, a differentiation was made between the single and the married man. With that principle we are in entire agreement. We are offering no criticism of it. We are finding no fault with it or with the general scheme, but we say that the operation of the Income Tax begins at too low a figure. In any case, if it is to continue to operate as from £225, which is very little more than £100 at pre-War value, the 6s. tax certainly ought not to come into operation after the £225 taxable income. It is because we desire that with a graduated Income Tax the burden should fall gently and steadily upon incomes as they assume great dimensions that we propose the Amendment in the form placed on the Paper.
It is not at all necessary to labour this point. It must be patent to everybody that a 6s. tax, operating on taxable incomes above £225, especially having regard to the fact that Income Tax is now operating at so low a figure, is a very irksome and burdensome imposition upon
a large section of the population. I do not think that in future this charge will affect many manual workers. Judging from the general tendency that has set in of reducing wages all round the probabilities are that very few manual workers will come in for Income Tax payments, even under existing schemes. Certainly, however, a considerale section of what is known as the lower middle class, and anyone who has an income that brings him on to the 6s. tax directly after the £225 of taxable income, must be feeling the pinch of this, and undergoing a very severe strain indeed. I, and those associated with me, think that ours is a perfectly just, equitable and reasonable proposition to make, and we hope the Chancellor of the Exchequer will see his way to its adoption.

Mr. WATERSON: I regret that the Chancellor of the Exchequer has allowed this Clause to pass by without giving to the Committee some intimation of his attitude upon it. I shall be perfectly willing to give way in order to hear what he has to say, but I did not feel justified in allowing the Clause to be put before the right hon. Gentleman had had an opportunity of replying.

Sir R. HORNE: I did not desire to show any discourtesy to the Committee in this matter. I was not aware that my hon. Friend (Mr. Hartshorn) had sat down, because I was discussing another point at the moment when his speech ended. The question is really a very simple one. I have only to remind the Committee of what I said earlier in the day, that the scheme of Income Tax in operation at the present time is one that was very carefully considered by the Royal Commission which reported recently, and that practically the whole of its recommendations were put into legislative effect by the Finance Act of last year. If you alter one part of it you have to proceed to make alterations in every other part, because the system represents a complete scheme. It may be possible to produce instances in which you think you can justify some new arrangement, but if you do that you have to begin to apply the new theory to the whole. It is too soon to do that. You will make a great mistake if you start with the idea that without a general plan you can make differences in any particular item. The Mover of the Amendment says it is wrong
that people with an income little above £225 should be assessed at 6s. in the pound. But that is to present a complete misapprehension of the scheme. Nobody pays 6s. in the pound on his whole income unless the income reaches £3,000 a year. One of the effects of the graduated scheme is that while you may at a comparatively early stage in your income be paying 6s upon a portion of it, the effect of the whole graduation, taking allowances into account, is that nobody is paying 6s. on the whole of his income until he is a man of comparatively large emoluments. If you take, for example, what is being paid on the whole of an income of £300, even if it is unearned income, you will get only 1s. 8d. on the whole of it. At £400 you pay 2s. 3½d. per pound; at £500 you pay 3s. per pound; at £600 you pay 3s. 6½d. per pound; and so on.

Mr. HARTSHORN: Is it not a fact that on all income over £225 a charge is made of 6s. in the pound?

Sir R. HORNE: No. That is where there is a great deal of misunderstanding. There has been issued to everybody a scale which shows how the Income Tax works. The scale cannot be regarded as bearing too harshly even upon the small incomes. That is the reply upon the merits of what has been said. I am sure everybody understands that to-day we cannot sacrifice any source of revenue. The Amendment would reduce revenue by £8,000,000 a year. That is a loss which, frankly, I cannot afford to face now, and I am sure the Committee will not ask me to do so.

11.0 P.M.

Mr. HARTSHORN: I am not a man with a big income, but I am paying 6s. in the pound on part of my income. I made my return to the Paymaster-General and I got a note from the local Surveyor of Taxes telling me that he had been informed by the Paymaster-General that he should charge me on £225 at 3s. in the pound and on the remainder at 6s. in the pound. That is the way in which my own Income Tax is made out and that is the assessment upon which I have paid.

Apparently the view of the Chancellor of the Exchequer is that it is not correct. I want to understand exactly what is the present position. It is certainly very irksome if, on limited incomes, people are to be asked to pay 6s. in the pound.

Mr. WATERSON: I wish to point out that my hon. Friends on this side of the Committee are not anxious to limit in the slightest degree those avenues whereby the Chancellor of the Exchequer may get the necessary revenue for the country. The main purpose which we have in view is to show that the people in the country are not being taxed according to their ability to pay and that the rate of Income Tax as it affects those who are in receipt of the smaller incomes is vastly greater in proportion than the rate imposed on those who have the larger incomes. I desire to submit to the Committee one or two figures which have been brought to my notice. I notice that those people who have incomes of £14,000 only pay a tax of 9s. in the £ and that a tax of 10s. in the £ is levied on incomes of £40,000. The jump from 9s. to 10s. which is the difference between the rate on the £14,000 and the £40,000 incomes is, in our humble judgment, not satisfactory as compared with the rate of tax on the lower incomes.

Sir R. HORNE: My hon. Friend is entirely ignoring the Super-tax.

Mr. WATERSON: I will admit there is something in the right hon. Gentleman's argument, but even putting the Super-tax in conjunction with the Income Tax, I venture to say that on the income which the individual derives, the lower paid persons are in proportion liable to a greater Income Tax. It is upon that basis we contend an injustice is being perpetrated particularly upon the middle classes of the country, and on that ground we ask the Committee to give favourable consideration to this Amendment.

Question put, "That the Clause be read a Second time."

The Committee divided: Ayes, 44: Noes, 188.

Division No. 185.]
AYES.
[11.5 p.m.


Barker, G. (Monmouth, Abertillery)
Cairns, John
Davies, Alfred Thomas (Lincoln)


Barnes, Major H. (Newcastle, E.)
Cape, Thomas
Davison, J. E. (Smethwick)


Bowerman, Rt. Hon. Charles W.
Carter, W. (Nottingham, Mansfield)
Entwistle, Major C. F.


Bromfield, William
Cowan, D. M. (Scottish Universities)
Graham, R. (Nelson and Colne)


Brown, James (Ayr and Bute)
Davies, A. (Lancaster, Clitheroe)
Grundy, T. W.


Guest, J. (York, W. R., Hemsworth)
MacVeagh, Jeremiah
Swan, J. E.


Hayday, Arthur
Morgan, Major D. Watts
Thomson, T. (Middlesbrough, West)


Hayward, Evan
Newbould, Alfred Ernest
Thorne, G. R. (Wolverhampton, E.)


Hogge, James Myles
O'Grady, James
Waterson, A. E.


Holmes, J. Stanley
Raffan, Peter Wilson
White, Charles F. (Derby, Western)


Irving, Dan
Richardson, R. (Houghton-le-Spring)
Williams, Col. P. (Middlesbrough, E.)


Johnstone, Joseph
Robertson, John
Wood, Major M. M. (Aberdeen, C.)


Kenworthy, Lieut.-Commander J. M.
Rose, Frank H.



Kenyon, Barnet
Royce, William Stapleton
TELLERS FOR THE AYES.—


Kiley, James Daniel
Shaw, Hon. Alex. (Kilmarnock)
Mr. Hartshorn and Mr. Frederick


Lawson, John James
Spencer, George A.
Hall.


NOES.


Addison, Rt. Hon. Dr. Christopher
Ganzoni, Sir John
Newman, Sir R. H. S. D. L. (Exeter)


Agg-Gardner, Sir James Tynte
Gee, Captain Robert
Nicholson, Reginald (Doncaster)


Amery, Leopold C. M. S.
Gibbs, Colonel George Abraham
Nicholson, William G. (Petersfield)


Armitage, Robert
Gilmour, Lieut.-Colonel Sir John
Nield, Sir Herbert


Atkey, A. R.
Glanville, Harold James
Ormsby-Gore, Hon. William


Bagley, Captain E. Ashton
Goff, Sir R. Park
Parker, James


Baird, Sir John Lawrence
Gould, James C.
Perkins, Walter Frank


Baldwin, Rt. Hon. Stanley
Goulding, Rt. Hon. Sir Edward A.
Perring, William George


Balfour, George (Hampstead)
Green, Joseph F. (Leicester, W)
Pollock, Sir Ernest Murray


Barlow, Sir Montague
Greig, Colonel Sir James William
Pownall, Lieut.-Colonel Assheton


Barnett, Major Richard W.
Gretton, Colonel John
Pratt, John William


Barnston, Major Harry
Gritten, W. G. Howard
Pretyman, Rt. Hon. Ernest G.


Barton, Sir William (Oldham)
Hacking, Captain Douglas H.
Purchase, H. G.


Bell, Lieut.-Col. W. C. H. (Devizes)
Hailwood, Augustine
Rae, H. Norman


Bellairs, Commander Carlyon W.
Hall, Lieut.-Col. Sir F. (Dulwich)
Rankin, Captain James Stuart


Benn, Capt. Sir I. H., Bart. (Gr'nw'h)
Hamilton, Major C. G. C
Remer, J. R.


Betterton, Henry B.
Harmsworth, C. B. (Bedford, Luton)
Remnant, Sir James


Birchall, Major J. Dearman
Henderson, Major V. L. (Tradeston)
Richardson, Alexander (Gravesend)


Bird, Sir A. (Wolverhampton, West)
Hennessy, Major J. R. G.
Roberts, Samuel (Hereford, Hereford)


Bird, Sir William B. M. (Chichester)
Henry, Denis S. (Londonderry, S.)
Robinson, S. (Brecon and Radnor)


Boscawen, Rt. Hon. Sir A. Griffith-
Hewart, Rt. Hon. Sir Gordon
Rodger, A. K.


Boyd-Carpenter, Major A.
Hickman, Brig.-General Thomas E.
Sanders, Colonel Sir Robert Arthur


Bramsdon, Sir Thomas
Hope, Lt.-Col. Sir J. A. (Midlothian)
Sassoon, Sir Philip Albert Gustave D.


Breese, Major Charles E.
Hope, J. D. (Berwick & Haddington)
Scott, Leslie (Liverpool, Exchange)


Bridgeman, Rt. Hon. William Clive
Hopkins, John W. W.
Seager, Sir William


Briggs, Harold
Hopkinson, A. (Lancaster, Mossley)
Seddon, J. A.


Brittain, Sir Harry
Horne, Edgar (Surrey, Guildford)
Seely, Major-General Rt. Hon. John


Broad, Thomas Tucker
Horne, Sir R. S. (Glasgow, Hillhead)
Shaw, Capt. William T. (Forfar)


Brown, Major D. C.
Hotchkin, Captain Stafford Vere
Smith, Sir Allan M. (Croydon, South)


Bruton, Sir James
Hunter, General Sir A (Lancaster)
Smith, Sir Harold (Warrington)


Buckley, Lieut.-Colonel A.
Hunter-Weston, Lieut.-Gen. Sir A. G.
Smith, Sir Malcolm (Orkney)


Burn, Col. C. R. (Devon, Torquay)
James, Lieut.-Colonel Hon. Cuthbert
Sprot, Colonel Sir Alexander


Butcher, Sir John George
Jameson, John Gordon
Stanier, Captain Sir Seville


Carr, W. Theodore
Jephcott, A. R.
Stanley, Major Hon. G. (Preston)


Cautley, Henry Strother
Jones, Henry Haydn (Merioneth)
Starkey, Captain John Ralph


Chadwick, Sir Robert Burton
Joynson-Hicks, Sir William
Steel, Major S. Strang


Chamberlain, Rt. Hn. J. A. (Birm. W.)
Kellaway, Rt. Hon. Fredk. George
Stephenson, Lieut.-Colonel H. K.


Chamberlain, N. (Birm., Ladywood)
Kidd, James
Sturrock, J. Leng


Clough, Robert
King, Captain Henry Douglas
Sugden, W. H.


Colvin, Brig.-General Richard Beale
Lane-Fox, G. R.
Sutherland, Sir William


Conway, Sir W. Martin
Law, Alfred J. (Rochdale)
Taylor, J.


Coote, Colin Reith (Isle of Ely)
Lewis, Rt. Hon. J. H. (Univ., Wales)
Thomson, F. C. (Aberdeen, South)


Cope, Major William
Lindsay, William Arthur
Thomson, Sir W. Mitchell- (Maryhill)


Cory, Sir J. H. (Cardiff, South)
Lloyd, George Butler
Tryon, Major George Clement


Cowan, Sir H. (Aberdeen and Kinc.)
Lloyd-Greame, Sir P.
Turton, Edmund Russborough


Davidson, Major-General Sir J. H.
Locker-Lampson, G. (Wood Green)
Wallace, J.


Davies, Thomas (Cirencester)
Locker-Lampson, Com. O. (H'tingd'n)
Ward-Jackson, Major C. L.


Davies, Sir William H. (Bristol, S.)
Lorden, John William
Watson, Captain John Bertrand


Davison, Sir W. H. (Kensington, S.)
Loseby, Captain C. E.
Weston, Colonel John Wakefield


Dewhurst, Lieut.-Commander Harry
Lyle, C. E. Leonard
Wheler, Col. Granville C. H.


Doyle, N Grattan
M'Curdy, Rt. Hon. Charles A.
White, Col. G. D. (Southport)


Edwards, Major J. (Aberavon)
Mackinder, Sir H. J. (Camlachie)
Wild, Sir Ernest Edward


Elliot, Capt. Walter E. (Lanark)
M'Lean, Lieut.-Col. Charles W. W.
Willey, Lieut.-Colonel F. V.


Eyres-Monsell, Com. Bolton M.
McNeill, Ronald (Kent, Canterbury)
Williams, C. (Tavistock)


Evans, Ernest
Mallalieu, Frederick William
Wood, Hon. Edward F. L. (Ripon)


Falcon, Captain Michael
Manville, Edward
Worsfold, T. Cato


Falle, Major Sir Bertram Godfray
Mitchell, William Lane
Worthington-Evans, Rt. Hon. Sir L.


FitzRoy, Captain Hon. Edward A.
Molson, Major John Elsdale
Young, E. H. (Norwich)


Ford, Patrick Johnston
Moore, Major-General Sir Newton J.
Young, Sir Frederick W. (Swindon)


Forestier-Walker, L.
Moore-Brabazon, Lieut.-Col. J. T. C.
Younger, Sir George


Foxcroft, Captain Charles Talbot
Morden, Col. W. Grant



Fraser, Major Sir Keith
Morrison, Hugh
TELLERS FOR THE NOES.—


Fremantle, Lieut.-Colonel Francis E.
Neal, Arthur
Colonel Leslie Wilson and Mr.


Gange, E. Stanley
Newman, Colonel J. R. P. (Finchley)
Dudley Ward.

Mr. R. McNEILL: I beg to move "That the Chairman do report Progress, and ask leave to sit again."
I do this for the purpose of asking the Chancellor of the Exchequer how far he
proposes to go to-night, and if he will indicate how late he proposes to keep the House?

Lieut.-Commander KENWORTHY: May I also appeal to the Chancellor of the
Exchequer not to keep the House sitting too late in discussing these somewhat complicated Clauses, especially the one to be moved by my hon. Friend sitting below me (Mr. Holmes), which occupies three pages of the Paper. It is not the fault of the Opposition that the Debate was interrupted at 8.15. That was the fault of his own supporters, who, I notice, are not in their places now. I do not think it is treating us altogether fairly to take these Clauses late to-night. We have made very good progress.

Sir R. HORNE: I should be glad to respond to that appeal, but, unfortunately, Parliamentary time is restricted. I anticipate that the House wants to rise at a reasonable period, and accordingly we have got to arrange the business so as to ensure that the House will get up before we are all so absolutely exhausted as to be incapable of doing effective business.

Lieut.-Commander KENWORTHY: Do you mean to-night?

Sir R. HORNE: No, I mean in August. There is only a limited time between now and then, and having regard to the time which has been allotted to previous discussions on the Finance Bill, I do not think I am asking too much of the Committee in asking that we should get through the Committee stage of the Bill within this sitting and another, the second being on Friday. That is the limit of time that can be devoted to the discussion. It is unfortunate that we have been interrupted in the course of the debate this evening by a motion for the adjournment, and I must ask the indulgence of the Committee to sit to-night till we have accomplished the discussion of the whole of the new clauses, leaving for Friday the discussion on the schedules. Though I cannot say to my hon. Friend what hour of the night we shall be able to adjourn, I do give him quite definitely the statement that I think it is necessary that we should have all the Clauses disposed of before we rise to-night.

Question, "That the Chairman do report Progress, and ask leave to sit upon," put and negatived.

The CHAIRMAN: The proposed new Clause (Application of Corporation Profits Tax), standing on the Order
Paper in the name of the hon. Member for Kettering (Mr. Waterson) and other hon. Members, is out of place. A similar proposal was discussed on Clause 40, and negatived.

NEW CLAUSE.—(Abolition of office of assessor.)

(1) The office of assessor shall cease to exist, and all general and particular notices directed by the Income Tax Acts to be given by an assessor requiring persons to make returns shall be given by the surveyor within such time and in such manner as the Commissioners of Inland Revenue direct, and any such return shall be delivered to the surveyor.

(2) The provisions of the Income Tax Acts relating to general and particular notices and the delivery of or failure to deliver returns shall have effect subject to the provisions of this section.

Provided that the time within which any such return is to be delivered to the surveyor shall be such time, not being less than twenty-one days, as may be specified in the notice requiring the return, subject, however, to any provisions of the Income Tax Acts as to the extension of time for such delivery.

(3) All notices and precepts which are required to be given or issued by or in pursuance of the Income Tax Acts by means of service or delivery by an assessor, may be served by post.—[Mr. Holmes.]

Brought up, and read the First time.

Mr. HOLMES: I beg to move, "That the Clause be read a second time."
I will deal with this matter as briefly as I can, having regard to the importance of the subject, though it is unfortunate that the discussion on this and cognate subjects in the proposed new Clauses, which fill three pages of the Order Paper, should come on now. Doubtless, however, the Chancellor will welcome ventilation of the matter. The Committee will remember that the Government introduced a Bill called the Revenue Bill in the early part of the session. It contained two important points. The first was the abolition of the three years average so far as income tax was concerned, and the second was the alteration in the rules for the administration of the income tax by bringing the law more in accordance with the practice of many years. That Bill was withdrawn after there had been a campaign of opposition in the London Press and a certain section of the provincial Press in regard to what may be called the administration Clauses of the Bill. Those who conducted the campaign congratu-
lated themselves on the success of their campaign, but I think the House of Commons knows that the withdrawal of the Bill had nothing to do with the administration Clauses, but because of the other point I mentioned a moment ago. I therefore have ventured to put down as new Clauses to this Finance Bill the whole of the administration Clauses which the Government themselves included in their Revenue Bill.
As briefly as possible I will attempt to explain to the Committee what they mean. Income Tax in this country dates back to 1798, when Mr. Pitt carried through an Act "for granting to His Majesty an aid and contribution for the prosecution of the war." The method enacted was that of imposing additional duties of assessed taxes, regulated by the amount of income which, the persons already charged with assessed taxes possessed. The following year in 1799 these duties were repealed and a duty of 10 per cent, was imposed upon incomes. In 1803 the practice of charging income at the source was introduced when the duty of 10 per cent, was abolished and the rate of income tax varied between 3d. and 1s. in the £. It is worthy of notice that the yield of income tax that year, the first in which taxation at the source was introduced, was as great as the 10 per cent, of the previous year on income as returned by the taxpayer, although the rate of tax was half or less than in the previous year. In 1816 the tax was abandoned and for 26 years no income tax was imposed in this country.
In 1842 Sir Robert Peel introduced the Act of that year and he reintroduced the principle which had always previously been in existence when the tax was imposed before that date that income tax should be assessed by the taxpayers themselves, and that the Crown officials should merely survey in order to secure the proper amount of tax reaching the revenue. The 1842 Act was embodied in the Income Tax Act of 1918, but the principle contained therein continues to the present day by law, namely that the taxpayers assess themselves to income tax while the Crown merely surveys and sees that the proper amount of the tax reaches the revenue authorities. In accordance with that principle we have in this country at the present time about 650 bodies of unpaid local commissioners in England
and Wales, and the administration and collection of Income Tax is according to law carried out by them with the help of their clerks and assessors and their collectors. The assessors are the men who by law should carry out the preliminary duties of obtaining the necessary information and of making the assessments. They first send out the notices requiring the returns to be sent in. They have to post up the church door notices and certify the assessments. They have to estimate the amount of a man's income if he makes no return. They have then to deliver particulars to the surveyor of taxes in order that the officials of the Inland Revenue may know the assessments that are proposed, and they may take any action on behalf of the Crown if they think the assessments are not correct.
Lastly, the assessors have to present their certificates and estimates to the local commissioners. It is then the duty of the local commissioners to make the assessment after hearing what the surveyors of taxes have to say. Of course, the collectors have to collect the taxes assessed by the local commissioners. So that the surveyors of taxes under the law have the right and duty of watching the interests of the Crown, and seeing that the correct amount is assessed, and comes to the Crown from each taxpayer. They can cause notice to be served on anybody whom the assessor has missed in serving notices with regard to the Income Tax, and they can object before the Commissioners to any assessments that are made. It will be seen, therefore, that the surveyors of taxes are not supposed to have any duties in connection with the direct assessment of the taxpayers. The Royal Commission reported that the practical adminstration of the income tax is in a highly efficient state, and with the Committee's permission I want to read that part of the Royal Commission's report, because it has been quoted in the Press campaign in connection with the contention that the Revenue Bill Administrative Clauses should not be passed. The Royal Commission said:
We are glad to be able to say that, to the best of our belief—and we have had some opportunities of judging—the practical administration of the Income Tax is in a highly efficient state. The growth and the development of the tax in recent years, and especially in the War period, has thrown great burdens upon the administration, but the system
has shown no signs of giving way under the strain, although the present high rates of tax tend to magnify difficulties that would have been insignificant while the rate was low. The growth in the yield of the tax has not been accompanied by any serious complaint against the administration. In short, the Income Tax is sensibly administered. But we are bound to say that this smooth working of the machine has been rendered possible only by considerable deviations from the scheme of administration originally conceived by the founders of the tax. The Income Tax Act of 1842, which follows earlier precedent, and, indeed, looks back to its origin to the old Subsidies Act, contemplated an almost purely local administration. The ancient county division was made the unit of area. Local unpaid commissioners were appointed for each division, and these commissioners appointed assessors, made assessments, heard appeals, certified to the authorities the amount to be due, appointed collectors, examined collectors' accounts, and certified the amounts that for any reason remained unpaid.
The local representative of the Crown, corresponding to the surveyor of taxes, had very little part in this scheme. He had powers of inspection, objection and surcharge, but in the main the local authorities were in supreme control and their powers were of the widest character. Little by little, however, this plan has been departed from in practice under the pressure of circumstances, and every change has been in the direction of making over to the surveyor of taxes the exercise of the powers that theoretically belonged to the local commissioners and their officials. Without this gradual devolution the machinery of the tax would have been found to be hopelessly inadequate, and we might have had a very different report to make on this aspect of our subject.
It will be found that many of the recommendations we have to make with regard to administration are directed towards recognising and giving legal sanction to these practical developments in the working of the tax which have so largely contributed to its success and removing those obstacles which so long as they remain act as a clog on the wheels of the machine.
That is the sole object of this Clause, namely, to make the law accord with the practice. If during the last twenty years, and certainly during the War period, the practice had followed the law, the machine would have completely broken down. The Surveyor of Taxes—I have used the word "Surveyor" all through, because it is used in the Revenue Bill. They are now called Inspectors of Taxes, and in the quotation which I have read from the Report of the Royal Commission the word "Inspector" is used, but it refers to the same person—the Inspector of Taxes, instead of merely surveying and seeing that the Crown receives its proper revenue, has in the main done all the work. The local commissioners were
supposed to administer the income tax of this country, but, while they have done excellent work, and I am not complaining or casting the slightest reflection on what they have done, they have been unpaid men, usually business men in each town, who could not give the timet—[HON. MEMBERS: "They do."]

Sir G. YOUNGER: I am one myself.

Mr. HOLMES: I do not wish to cast the slightest reflection on the work of the hon. Baronet.

Sir G. YOUNGER: As I wish to be strictly accurate, may I say that I am, of course, speaking of Scotland. I know nothing about what the local commissioners do in England, but I know that in Scotland they do all the assessing.

Mr. HOLMES: It is perfectly true that the local commissioners do all the assessing, but how do they do it?

Sir G. YOUNGER: By sitting there and poring over it hour after hour.

Mr. HOLMES: They have a book put before them with all the particulars put down. The suggestion that these local commissioners can go into the accounts of all the businesses and see that the returns are correct, or see that the three years' averages as estimated are correct, is absurd. It is not done anywhere. Hon. Members who are in business know that, in order to arrive at a three years' average correctly, the accounts have to be examined and the figures worked out; and it is the surveyors of taxes who have done that work, and not, as the hon. Baronet suggests, the local commissioners.

Sir G. YOUNGER: The surveyor of taxes, of course, has the accounts before him and makes the calculation, and it is quite honestly done, but it often happens that the local commissioners put the surveyor right, and the taxpayer too.

Mr. HOLMES: I understand the hon. Baronet to agree that the surveyor of taxes has the accounts before him and works out what is to be paid by each person, and then places it before the commissioners.

Sir G. YOUNGER: They work it out.

Mr. HOLMES: The surveyor of taxes works it out. That is the whole point. By law he is not supposed to do it. That
is the whole point of the Revenue Bill and of this Clause. It is the assessor, who acts under the local commissioners, who is supposed to do that; and the object of this new Clause is to put the law in accordance with what the practice actually is. The local commissioners' work, good and conscientious as it may be, is to a large extent formal. They act on figures put before them by the surveyor of taxes, and that is work which by law the surveyor of taxes should not do.

Mr. E. HORNE: The Commissioners act after consultation with the assessors, not with the surveyor of taxes.

Mr. HOLMES: It is the assessor who is supposed to place before the Commissioners the proposed assessment for any person, firm, or company.

Sir G. YOUNGER: He does so.

Mr. HOLMES: He does it formally. In actual practice it is the surveyor of taxes in every district who works out the figures and gives them to the assessor to place before the Commissioners.

Mr. E. HORNE: I never heard of the surveyor of taxes coming in at that time.

Mr. HOLMES: I will give an example of it in the evidence given before the Royal Commission, which really is the most satisfactory evidence that one can have.

Sir W. JOYNSON-HICKS: Do you accept all the evidence given before the Royal Commission?

Mr. HOLMES: Perhaps the hon. Baronet will deny this when he hears what it is. In the City of London, in the year 1919–20, out of 140,500 assessments, only 3,950 were entered in the books of the commissioners by the assessors. The remainder were entered by the surveyors of taxes in pencil, and the amounts were inked in afterwards by the assessors, thus giving an outward semblance of performance of their statutory duties. Only 3,950 assessments under Schedule E out of 140,500 were entered by the assessors and the rest of the work was done by the surveyors, who are not supposed, by law, to have anything to do with it.

Mr. RAWLINSON: Was that Income Tax under Schedule E?

The CHAIRMAN: There seems to me to be a good deal of interlocutory debate.
I cannot help thinking if hon. Members will allow the hon. Member for Derbyshire to finish his speech, it will shorten the proceedings in the end.

Mr. HOLMES: What applies to Schedule E equally applies to Schedule D. How many hon. Members, particularly those in business, have ever written to an assessor with regard to any point on which they differed with the assessment made upon them? How many of them have been to see an assessor? They are supposed to do it? Members of the public are not supposed to go to see a surveyor of taxes. They are supposed to go to an assessor. He is supposed to be their guide and friend who will assist them. No one thinks of doing it. If you want an interview you go and see the surveyor. If you write you write to the surveyor, and all the time he is doing something which is wrong by law and you are doing something that is wrong by law too.

Sir G. YOUNGER: So you do when he is the same.

Mr. HOLMES: He is never the same.

Sir G. YOUNGER: In almost every district in Scotland he is the same.

Mr. HOLMES: I know nothing about Scotland. There are 650 bodies of local commissioners in England and Wales, and in not one case is the Surveyor of Taxes in their district the same man as the assessor. In many cases the assessor and the collector are the same. Then they are in both cases servants of the Commissioners, but in no case in England and Wales is the surveyor of taxes the same man as the assessor. Surveyors of taxes are men who are trained in Income Tax law and practice and are able to deal, without formality and directly, with the tax payer, who cannot cope with the intricacies of the system nor face the local bodies that meet occasionally in formal session. During the war the surveyors of taxes have had exceptional duties thrust upon them with regard to the Munitions Levy Excess Profits Duty, Coal Mines Excess Payment, and other duties which they have managed to carry out with efficiency and with satisfaction to all concerned. The only object of this new Clause is to legalise what has been the actual practice for many years. There is no weakening nor destruction of the safeguards of the taxpayer. The taxpayers' safeguards are in being able to
appeal to either the general commissioner or the special commissioners. All these rights and appeals will still remain. This Clause does not suggest taking away any right of appeal which the taxpayer has got. What they take away from the commissioners is this. They give the taxpayer the right to settle the assessment direct with the surveyor of taxes if he agrees with them, and if he does not want to take them before the local body of commissioners. That is done for the taxpayers' safety. The general commissioners are usually local business men, and many taxpayers do not desire that either their friends or their enemies or their trade rivals shall have an opportunity of examining their accounts. Therefore this gives an opportunity, which is particularly favourable to the taxpayer, of being able to say to the Surveyor of Taxes: "You and I agree that my assessment is so much. You can make that assessment on me straight away, and I need not go before the local Commissioners. "That is the way these new Clauses would work. The General Commissioners and the Special Commissioners would still remain appellate bodies, and the taxpayer would have the same rights as before. The effect of the Royal Commission's own recommendations, which were included in the Government's Revenue Bill, would make for efficiency, economy and fairness. I do not know whether the Chancellor of the Exchequer will tell us to what extent this will make for economy, but so far as I can estimate it will save at least £50,000 a year in administration. The chief arguments put forward for the retention of the assessor are, in the first place, that his local knowledge is useful. So far as England and Wales are concerned the assessors are the same persons as the collectors. The collector is going to remain, and he will still have the opportunity of conveying to the surveyor the local knowledge which he acquires in his journey round the district.
It is also said that the assessor has been the friend of the taxpayer. What I say with regard to the local commissioners I say with regard to the assessors. I have no fault to find with the duties they perform. I believe that in the main
they have been courteous and friendly, but as a rule they have only devoted a small portion of their time to this work. They have had a main occupation, and have been appointed by the local commissioners to do this work, and as one of their side occupations. They have not the knowledge of the law of income tax, which the man of full time and fully trained like the surveyor of taxes has. In the ordinary way the ordinary assessor can no more answer a question on the complicated subject of double income tax than a child can translate an inscription on a Babylonian tomb. If this matter were handed over to the surveyors of taxes by law, as it is already handed over to them in practice, there would be more efficiency and more economy. During the past few years a new spirit has grown up in the Inland Revenue offices. There used to be a feeling that Inland Revenue officials would give no information to the taxpayer which was to the taxpayer's benefit. A new spirit has arisen. It certainly exists at the top and it has gradually worked down through all the districts, that the surveyors of taxes are prepared to advise the taxpayers as to their rights, and to explain to them the intricacies of the law. If the Revenue Bill had been passed the position would have been improved, and all the officials would be instructed that it was not their duty to take advantage of lack of knowledge on the part of the taxpayer, but that every facility and information should be given to them as to their rights under the law.
The opposition to the Revenue Bill started in the City of London, and it has been taken up by various local commissioners, as has been shown during the speech which I have made to-night. While the opposition to this has been started by certain assessors and has been aided and abetted by certain commissioners, not all the assessors and commissioners of the country are opposed to these Clauses which are included in the Revenue Bill. From one of the best-known Lancashire towns the clerk to the commissioners has written me to say:
There was a strong opposition to the Revenue Bill in a certain section of the London Press. Most of the articles in these papers were misleading, inaccurate, and grossly misrepresented the objects of the Bill and its results if passed. It is generally believed that the opposition had its origin in
the City of London and continues to draw its virulence from that source. My object in writing is to bring to your notice the fact that several bodies of commissioners and their clerks are strongly in favour of the Revenue Bill. In Lancashire, so far as I am aware, there was no opposition to the Bill. For instance, at a meeting in Liverpool, at which 16 out of the 20 Lancashire commissioners were represented, there was not a single opponent of the Bill.
These new Clauses, if passed into law, would make for efficiency of administration, increased economy all round, and for fairness all round to the taxpayer.

Sir R. HORNE: I cannot profess to differ in any way from the proposals which my hon. Friend has made, because they embody many provisions which were in a Revenue Bill for which I was partly responsible. I am very glad that he has taken the opportunity of delivering the speech which he has delivered to the Committee even at this late hour, because I am afraid that there has been very great misapprehension in the country with regard to the precise meaning of the provisions of the Revenue Bill, and that they do require to be explained in order to gain a measure of support which hitherto has been wanting. On the other hand, I am bound to point out that there is no time to make proper provision for them in the Finance Bill of the present year. To put the matter in concrete form, they profess to apply certain provisions with regard to assessors and commissioners in the present year, because the Finance Bill now before the Committee can deal only with the present year. The operations which the assessors have to perform have for the most part been done. Accordingly, these provisions would be totally inoperative so far as the present year is concerned. The assessors and commissioners have been appointed and their work is in full swing, and many of the arrangements which these provisions imply could not be carried out until a great many changes have been made. For that reason the Revenue Bill had a provision that it should not come into operation until the year 1922–23, and accordingly, while I agree with a great part of what my hon. Friend has said, I beg him on the present occasion not to press the matter so far as the present Finance Bill is concerned.

Mr. HOLMES: In view of what the Chancellor has said, may I ask him whether the Government have any inten-
tion at a later date of introducing these provisions into a Bill?

Sir R. HORNE: Undoubtedly the Government will take into consideration the views expressed, and at some subsequent date, when the time is more suitable, undoubtedly the provisions of the Bill will be presented again.

Mr. HOLMES: I beg to ask leave to withdraw the Motion.

HON. MEMBERS: No.

Sir G. YOUNGER: Before the Clause be withdrawn, may I point out to my right hon. Friend that he has given only a qualified answer as to the intentions of the Government with regard to the future of this measure? I hope that my right hon. Friend will consider whether the Scottish system could not satisfactorily be applied to England. Under the Scottish system, in the great majority of cases, the Assessor of Taxes is a Government official, but he is appointed by the local Commisioners and not by the Inland Revenue. He is also the Surveyor of Taxes. The system works admirably. I quite agree that many of the returns made need not really be taken before the local Commissioners. There are the yearly salaries paid by large and small companies to their employés. These are rendered by the Assessor of Taxes, who is also the Surveyor of Taxes. But the most important thing is that the individual is not the servant of the Inland Revenue as Assessor at all. He is the servant of the local Commissioners, who appoint him and control him. They can also remove him if they like. I hope my right hon. Friend will consider this point if he is going to make any changes.

Sir W. JOYNSON-HICKS: Before the Motion be withdrawn, may I say that I interrupted the hon. Gentleman (Mr. Holmes) not from any discourtesy, but because I did feel that it was not quite fair on the House of Commons, at this time, that a private Member should reintroduce a very important Government Bill right in the middle of the Finance Bill of the year. The Government introduced this Bill, and dropped it, because they could not get it through. It would be quite improper for the House of Commons to include—

Colonel WEDGWOOD: It was dropped because of your activities.

Sir W. JOYNSON-HICKS: It was dropped because the Government felt it would not be desirable to attempt to pass it. For a private Member to come forward, and try to introduce a whole revolution of the Income Tax law into the Finance Bill would be to take up the time of the House unnecessarily. That is why I was, perhaps, a little discourteous to my hon. Friend. I did not mean it as any personal discourtesy, but I must point out that if the Government do intend to introduce this scheme this year, it would meet with the same opposition.

Mr. RENDALL: I am sorry to delay the Committee, but I think it is my duty to say a word or two in support of the proposal. In this matter the Government have been singularly lacking in courage—

Mr. ALEXANDER RICHARDSON: On a point of Order. Has not the Mover withdrawn his Motion?

Colonel WEDGWOOD: No, we have not given him leave.

The CHAIRMAN: Leave has not been granted.

12 M.

Mr. RENDALL: The Government proposed a most excellent Revenue Bill which would have made a valuable alteration of the law, but, unfortunately, through the weakness and cowardice of their supporters, the Bill was withdrawn. It was one of those excellent and sensible administrative reforms which, if it had been pressed, the Government would have easily have been able to convince the House to pass into law. But because the Government was playing about with other things they could not find time for it. Now my hon. Friend has proposed this Clause which, if accepted, would put into the Finance Bill some important provisions. He has proposed that they should be incorporated in the Finance Bill, but the Chancellor of the Exchequer says it is not the right place or time. We have heard that ever since we were born. There is no time like the present. The Chancellor of the Exchequer smiles, knowing perfectly well that he is not likely—at all events it is very doubtful—that he will have an opportunity of bringing forward a Revenue Bill next year. I suggest that we might very well put this Clause in. It would make the law of the country in absolute accordance with the
practice. When I was in practice as a solicitor, I was constantly being asked to advise various traders and companies as to what they should do about Income Tax. I never once had the necessity of going before the Commissioners. In every case what figures could be obtained from the trader or company were produced, and at an interview with the Inspector of Taxes the matter was arranged. In 999 cases out of 1,000 the Inspector of Taxes makes the decision in regard to all disputable points raised by the taxpayer The local Commissioners know nothing about it. I lived in a large provincial town where this work was being done, and I do not know the name of a single local Commissioner in that town, and never have known it. All the time when I was in active practice we went to the Inspector of Taxes and nobody else. The Inspector was always spoken of as a person of greater intelligence than the local Commissioners, and he had far more experience. One felt when one once argued the case before him and he had given a decision, that that decision was probably the best in the circumstances. [HON. MEMBERS: "Agreed, agreed!"] Hon. Members who shout "Agreed" must understand that they must pay the penalty for the weakness of their Government. If you had been agreed a month or two ago the Revenue Bill might have been passed. [HON. MEMBERS: "Agreed!"] If you are agreed, then why did you not support your own Government? Why did you leave the Chancellor of the Exchequer in the lurch? [Interruption.] I am sorry that when we are discussing important matters like this, hon. Members should have this violent desire to interject remarks. It seems to me they should divert their minds—in so far as their minds are still awake—to the matters in hand. [HON. MEMBERS: "Agreed!"] It is a pleasure to speak to an enthusiastic audience even in the House of Commons, and I do so with no reluctance whatever, I assure you. Not only, as I have said, does the individual person go to the Inspector of Taxes and not to the Commissioner, but companies also adopt this course. Several companies in which I have a small interest employ the services of chartered accountants. The procedure followed on occasions when a very difficult acocunt has to be dealt with and when we do not know what
the Excess Profits Duty will be, is to go into the accounts at great length and arrive at a balance which seems to be accurate and fair and shows a certain amount of tax liable to be paid. What do we do then? [An HON. MEMBER: "Pay it!"] Oh, dear, no! We do not pay it. Do we go to the assessor? Do we go to the local Commissioner? No, what we do is to take the chartered accountant along to the Inspector of Taxes. We make an appointment with that gentleman. I want hon. Members to have every detail so that they may thoroughly understand my point. Having made our appointment and having kept it, we find ourselves in the room of the Inspector of Taxes [HON. MEMBERS: "Hear, hear!"] I congratulate the Committee on its quick sense of perception. We go into the room with him and sit down.

Mr. FILDES: May I inquire, does the Inspector of Taxes keep a box of cigars in his office?

Mr. RENDALL: The hon. Member asks a question which I am really unable to answer. I have not had the offer of a cigar under these circumstances. What then happens? The interview takes place. We place the case before the Inspector of Taxs, it is argued at length and all the facts are brought out, and all the implications to which those facts point are thoroughly discussed. After that discussion and with the facts fully before him the Inspector of Taxes makes a decision. Surely it is a farce. [HON. MEMBERS: "Agreed!"] I am glad hon. Members agree with me that it is a farce. If the Chancellor refuses to accept this Clause the whole Committee seems to be with me. It is absolutely a farce that taxpayers should be following a procedure which is practically prohibited by the law, in obtaining a decision on which taxes are to be paid, while the Commissioner and the Assessor are really the only authorities empowered to make that decision. I say you are not treating the Inspector of Taxes fairly. You are not giving him legal power to perform the work you expect him to do. I say therefore this Clause ought to be accepted. I think it is very sad that this Government with its enormous majority should be influenced into dropping the Revenue Bill. I think it is very regrettable that the Chancellor of the Exchequer cannot give us a little more hope that he is going to accept this Clause. It is all very well to say he will
accept it some other time. There is no time like the present. He might just as well accept it now, and save another newspaper campaign. I am quite certain the unanimous opinion of all persons who have any experience of work before the Inspector of Taxes proves the universal custom is as I have described, and that being so the law ought to support the custom. I do not want to detain the House for another moment, more particularly in view of the fact, as far as I can see, that they are in entire agreement with the arguments I have advanced.

Colonel WEDGWOOD: It is not the fault of hon. Members on this side of the Committee that we are discussing this very important matter at this hilarious hour. The Chancellor of the Exchequer has been a very short time in the House, or he would not have suggested that these Clauses should be reserved for some future Revenue Bill. I have seen four different Revenue Bills introduced into this House in the last seventeen years, and three of them never got as far as the Report Stage. It is the rarest thing to get a Revenue Bill through. A Revenue Bill is one of the easiest Bills on which to tack alien matter, and it is a Bill with the least Cabinet support behind it. The Revenue Bill in every case is the child of the permanent officials at the Treasury. It is the result of their experience, and it has no great party cry behind it to back it up, with the result that these excellent Revenue Bills are habitually—

Mr. FORD: On a point of Order. Is the hon. and gallant Gentleman's speech strictly relevant to the point before the Committee?

The CHAIRMAN: So far it is.

Colonel WEDGWOOD: I am glad to hear my speech is in order. My point is that these Revenue Bills are generally very carefully thought out by the permanent officials. They are introduced. Immediately some interested party or parties get hold of some Member of this House, such as the hon. Baronet the Member for Twickenham (Sir W. Joynson-Hicks), and he uses the opportunity to show the Government of the day the power that he wields both in the) Press and in the House of Commons, particularly if he feels that he has not been treated properly by that Govern-
ment. He takes the opportunity of wrecking their Bill. I am not referring in the least to the hon. Member for Twickenham (Sir W. Joynson-Hicks). I have seen it over and over again. I have done it myself. The Member, using the Press, and being assisted by people who are directly affected by the legislation, legislation intended to remove red tape and simplify the collection of the taxes, creates a sufficient opposition to make the Government reconsider their position and drop the Bill, which has no party behind it and from which no party advantage is to be gained, and the old, cumbersome machine goes on. In this case it was the clerks to the local Commissioners. They saw that if the Revenue Bill were carried they would lose their jobs.

Mr. A. RICHARDSON: Can the hon. Member discuss a Bill which has been dropped?

The CHAIRMAN: I understand the hon. Member is discussing a resurrected measure.

Colonel WEDGWOOD: The hon. Member who interrupted is probably not aware that for the last hour and a half we have been discussing an Amendment in which all these Clauses in the Revenue Bill, which was dropped, are to be inserted in the Finance Bill. I have several Amendments on the Paper which I originally drafted for the Revenue Bill and which I have transferred bodily to this Finance Bill. The real difficulty is that whereas a Revenue Bill can be dropped a Finance Bill must be passed, and therefore many Amendments which are germane to both are better moved on the Finance Bill than kept for the Revenue Bill. In this case the clerks to the local Commissioners were the backbone of the opposition which grew up under the leadership of the hon. Member for Twickenham and the "Times" newspaper. They wrecked the Revenue Bill, not in the interests of efficiency and of economy, but solely in their own interests, and we must take this opportunity, although it is a bad time, to protest against the action of the Government in conceding to that opposition the victory of wrecking the Bill.
I hope, even at this late hour, we shall have a Division to show to what extent
public opinion, on these benches at any rate, is in favour of efficient administration. The Treasury is the backbone of our financial strength, and unless we provide the Treasury with efficient machinery, especially with all these new taxes coming along, we shall be landed in a great financial muddle as well as in much pecuniary loss. It was all very well to carry on with the old machinery so long as income tax was 1s. 3d., but now that it is 6s. in the pound, and we have the super-tax as well, it is infinitely more important that we should have the best machinery for collecting the taxes, and I am glad to say the party with which I am connected, and for which I speak tonight, has throughout backed the Revenue Bill. [HON. MEMBERS: "Which party?"] The Labour party. The last train has gone, and only those Members of the Labour party who can afford cabs can remain to discuss it. There are two of us, I gather, who can afford cabs. That is one of the misfortunes of legislating at this time of night.

The CHAIRMAN: This is not a Motion to report Progress, but a Clause for the abolition of the office of assessors.

Colonel WEDGWOOD: The assessors to the Local Commissioners were the real backbone to the opposition to the Revenue Bill. Then, again, very often they do not know their local commissioners. My first experience as a Member of Parliament was an application from the Treasury asking me to nominate six gentlemen as local commissioners of Income Tax. They explained it did not matter who they were, but that there always were in every constituency certain people who liked to be Commissioners of Taxes. It was a sort of honorary appointment, less onerous than being a Justice of the Peace, and more convenient than being a member of the Victorian Order. If there was a certain demand for this position I do not know why we—

The CHAIRMAN: May I again remind the hon. and gallant Gentleman that we are on Clause 1, which deals with the abolition of the assessors.

Colonel WEDGWOOD: Yes, and if you abolish them the local commissioners will follow in their wake. The Commissioners were set up in 1846 by Sir Robert Peel. They are out of date now. On that ground alone I think the new machinery proposed
in the Revenue Bill ought to have been sufficiently considered by this House, and I think that a definite statement from the Front Bench is desirable dealing with their reasons for introducing that Bill, and also why they withdrew it, why the Amendments wilted away under pressure from the hon. Member for Twickenham. Before we vote we ought to have some explanation.

Motion and Clause, by leave, withdrawn.

Colonel WEDGWOOD: On a point of Order. I object. We have already had a request to withdraw this Motion and it was objected to. The hon. Baronet the Member for Ayr Burghs (Sir G. Younger) objected to its being withdrawn, and spoke on it. There has been no statement again requesting that it should be withdrawn, and I submit to you that you are wholly out of order.

The CHAIRMAN: It is not for the hon. and gallant Member to say that to me. Before the Motion was withdrawn the hon. Baronet wished to make one or two remarks, and he was followed by one or two other Members. Then the question for withdrawing the Motion was put and voted upon. The hon. and gallant Gentleman was too late in objecting.

Colonel WEDGWOOD: On a point of Order—

The CHAIRMAN: We have passed on to the next Amendment.

Colonel WEDGWOOD: I must get this put right. [HON. MEMBERS: "Order! Order!"]

NEW CLAUSE.—(Exemption from male servant's licence of persons employed by local authorities.)

"The term 'male servant' as used in the Act, 32 and 33 Victoria, chapter 14, shall not include a 'servant' who is bonâ fide employed by any county council, town council, or other authority having power directly or by means of precept, certificate, or other document requiring payment from another authority, to levy a rate in terms of Act of Parliament, or by a body undertaking the administration of education in Great Britain, notwithstanding that the duties of such servant may involve all or any of the duties of any of the servants described as 'male servants' within the meaning of section nineteen, sub-section (3), of the said Act."—[Mr. Ford.]

Brought up, and read the First time.

Mr. FORD: I beg to move, "That the Clause be read a Second time."
I understand the Chancellor of the Exchequer practically agrees to this, though objecting to certain of the phraseology in it. I will not go into the merits of this Clause, but merely mention that the desire of those who put down this proposed Clause is twofold. We wish to avoid unnecessary litigation in connection with the subject matter of the Clause. We also want to carry out what was obviously the intention of Parliament, although it has been otherwise determined, and that is to exempt from taxation the servants of public bodies, as they cannot be considered luxuries. Male servants are taxed as luxuries, but with public bodies they are used for the proper, decent, and, in fact, efficient carrying out of their public duties. I have also the greatest sympathy with this clause because it removes one more obstacle from the employment of ex-Service men.

Sir R. HORNE: I hope my hon. Friend will withdraw the Clause in view of the fact that I am perfectly willing to draft a Clause which will meet the object he has in view. The phraseology he has adopted is not entirely suited to the case.

Captain W. BENN: As I have my name to a similar Clause I should like to thank the Chancellor of the Exchequer for what he has said. He is aware that the position in Scotland differs from the position in England in that in Scotland judgments have been given on this matter but none have been given in England. I presume the Clause will be put down before the Report stage is reached.

Mr. FORD: On those conditions, I shall be very happy to withdraw the Clause.

Motion and Clause, by leave, withdrawn.

NEW CLAUSE.—(Charities, s. 37 (1) (a) of Act of 1918.)

The relief granted to charities under Section thirty-seven, Sub-section (1), paragraph (a) of The Income Tax Act, 1918, shall be deemed also to apply to any lands or property owned and occupied by the charities to which that section applies.—[Mr. G. Locker-Lampson.]

Brought up, and read the First time.

Mr. LOCKER-LAMPSON: I beg to move "That the Clause be read a Second time."
I should be very glad indeed if my right hon. Friend could accept this small Amendment, which is intended to remove a very old anomaly. Charities are exempted from income tax on rents which they receive from land and houses, but they are not exempted from income tax on the land they actually occupy themselves. Take a charity that has a hall in London for the entertainment of the very poor. They have to pay tax on that. But next door they have a coffee tavern, which they let to a firm of caterers, and get a rent for it. They do not pay the tax on that rent. That really is an extraordinary anomaly. The Royal Commission recommended that this anomaly should be done away with. The reference is page 68, paragraph 308. They recommended that the two things should be put on the same footing.

Sir E. POLLOCK: The point which my hon. Friend has put before the Committee is one, I think, with which they will naturally have a good deal of sympathy, but he has forgotten that the Royal Commission, in making its recommendation, qualified it by saying that something might be done on this point if and when the definition of "charity" had been made more precise and was no longer left in the large terms under which it at present lies in the Act of 1918, as construed by judicial decisions. Charities at the present time come under four main heads. They embrace any institution carried on for the relief of poverty, for the advancement of education, for the advancement of religion, and for "other purposes beneficial to the community." All these are charities. The Royal Commission said that until a more precise and limited definition of charity were arrived at, it would be impossible to give the relief suggested, and a good many other forms of relief which were suggested by the Commission. The difficulty of accepting the Clause now—quite apart from the structure, with which I will not trouble my hon. Friend, though I think he has got the wrong portion of the Act of 1918—would be that in all cases where premises belong to what is called a charity, that is, an institution carried on for purposes beneficial to the public, this exemption would apply and a very large amount of revenue would be lost. The Clause opens such a
very wide door that it is impossible to accept it.

Mr. RAWLINSON: The learned Solicitor-General somewhat misread the finding of the Royal Commission. I quite agree that there should be a further definition of the word "charity," but if he looks at Section 308 he will find there that the Commission expressly state that, assuming there was no alteration in the definition of charity, after a reasonable time it was desirable that this alteration should be made. Certainly that reasonable time has elapsed, and the Government has taken no steps towards defining the word "charity." Can you imagine a more reasonable alteration? If a charity own land, and they let it, they are exempt from income tax, and if they occupy it they are liable to the tax. That was a decision in a case which occurred in what is called the Essex Hall in Essex Street, a case which was held for certain scientific purposes and so forth. It was clearly a mistake in the Act, and the Judges'—'the Solicitor-General knows the case quite as well as I do—comments were in the strongest possible terms, and they had to pronounce on the mistake that was put in the Act of Parliament.

Sir E. POLLOCK: Perhaps the hon. and learned Gentleman will give the exact terms. He has forgotten the sentence
when the term charity has been re-defined or alternatively within some reasonable time, premises owned and occupied by a charity.
He must not overlook the words
when the term charity has been redefined.

Mr. RAWLINSON: Or a reasonable time. I said that. A reasonable time has elapsed, and the Government has not brought or attempted to bring in any fresh definition of a charity or
alternatively within some reasonable time.
Therefore I was perfectly right in saying what I did. I am absolutely right in saying that the Royal Commission have recommended that this absurd anomaly should be altered. It is a ridiculous position that a charity which kept or owned lands has to pay Income Tax upon them, but a charity which lets them are exempt from that altogether. There was a case given on the Second Reading of the Bill by a legal Member who instanced very strongly the case of a lifeboat institution
which owned different sheds or shelters for their lifeboats around the shores of England. They have to pay Income Tax upon them, but if they owned land, as they probably do, and get rent from it, they are exempt from Income Tax. Nothing can be more ridiculous than that. I did press the Government and the Chancellor of the Exchequer on this point on the Second Reading. It has been characterised in the strongest possible terms by judges, and we have the recommendation of the Royal Commission. It does not involve much loss to the Exchequer and it does an inestimable amount of harm to bodies which are very much affected by it like such bodies as the London Playing Fields. They supply playing grounds in London and these are practically being taxed out of existence at the present time. What is the effect if you tax them out of existence? You come down to a municipal scheme for providing playgrounds for London; either the London County Council will provide them or the Government will subsidise them. They are now kept and well managed by private enterprise. They are used for playing football, cricket and other games and at the present time they are absolutely taxed out of existence because they have to pay income tax upon the lands they occupy. I do appeal most strongly to the Chancellor of the Exchequer not to put forward the legal point but to hold out some hope that this matter will be considered between now and the Report stage. It is a crying evil and a ridiculous anomaly.

Mr. RONALD McNEILL: I cannot imagine that the Government is going to leave this matter without some reply after the speech of my hon. and learned Friend opposite. It seems to me that he has made out a strong case. If a Division is taken I shall have to go into the Lobby with him.

Mr. LOCKER-LAMPSON: When the Solicitor-General replied after I moved this new Clause he said that it was structurally inaccurate—I forget the exact words he used—and that I quoted the

wrong part of the original Act, and I do not quite know what he means. I have the original Act of 1918 in my hand, and Section 37, Sub-section (1), paragraph (a), says:
The Charities are exempted from the tax under Schedule A in respect of the land and profits of land.
I simply seek in this new Clause that the relief granted under that should be extended to charities that are actually in occupation.

Sir R. HORNE: Rents and profits only apply to the premises which are let. Accordingly, the Clause which is sought to be inserted is entirely inapposite for the purposes of my hon. Friend and my hon. and learned Friend on the Back Bench. I have been very much impressed with the taxation of charities ever since I gave any attention to it, but at the present moment the matter is one of very great difficulty. If you do bring in concessions with a large and generous hand, the effect undoubtedly would be to make exemptions to a very large number of organisations which, in effect, are not charities at all. It has been a matter of very considerable difficulty to find a definition of charities which would give relief to the people who, indeed, deserve it. I am willing to give the Committee this assurance. I do not profess to be able to clear up the whole matter between now and the Report stage, but between now and the next Finance Bill I shall devote my attention to have the whole matter investigated not merely with regard to the kind of charity to which the Mover of this Clause has referred, but to the playing fields case which has certainly moved my conscience. That was why I did not hasten to get up and reply as I cannot give an assurance that the matter can be successfully cleared up between now and the Report stage. But I do give the Committee the assurance that the whole matter shall be cleared up before the next Finance Bill comes into law.

Question put, "That the Clause be read a Second time."

The Committee divided: Ayes, 34; Noes, 121.

Division No. 186.]
AYES.
[12.40 a.m.


Acland, Rt. Hon. Francis D.
Butcher, Sir John George
Gould, James C.


Armitage, Robert
Conway, Sir W. Martin
Gretton, Colonel John


Barnes, Major H. (Newcastle, E.)
Cowan, D. M. (Scottish Universities)
Hamilton, Major C. G. C.


Barton, Sir William (Oldham)
Entwistle, Major C. F.
Henderson, Major V. L. (Tradeston)


Benn, Captain Wedgwood (Leith)
Fildes, Henry
Holmes, J. Stanley


Hopkins, John W. W.
Mallalieu, Frederick William
Shaw, Hon. Alex. (Kilmarnock)


Horne, Edgar (Surrey, Guildford)
Morgan, Major D. Watts
Thomson, T. (Middlesbrough, West)


Johnstone, Joseph
Newbould, Alfred Ernest
Wedgwood, Colonel Josiah C.


Jones, Henry Haydn (Merioneth)
Ormsby-Gore, Hon. William



Joynson-Hicks, Sir William
Raffan, Peter Wilson
TELLERS FOR THE AYES.—


Lane-Fox, G. R.
Remnant, Sir James
Mr. Godfrey Locker-Lampson and


McNeill, Ronald (Kent, Canterbury)
Rendall, Athelstan
Mr. Rawlinson.


MacVeagh, Jeremiah
Seddon, J. A.



NOES.


Agg-Gardner, Sir James Tynte
Ford, Patrick Johnston
Pickering, Colonel Emil W.


Amery, Leopold C. M. S.
Forestier-Walker, L.
Pollock, Sir Ernest Murray


Bagley, Captain E. Ashton
Foxcroft, Captain Charles Talbot
Pownall, Lieut.-Colonel Assheton


Baldwin, Rt. Hon. Stanley
Fraser, Major Sir Keith
Purchase, H. G.


Balfour, George (Hampstead)
Fremantle, Lieut.-Colonel Francis E.
Raper, A. Baldwin


Barlow, Sir Montague
Gange, E. Stanley
Richardson, Alexander (Gravesend)


Barnett, Major Richard W.
Ganzoni, Sir John
Roberts, Samuel (Hereford, Hereford)


Barnston, Major Harry
Gee, Captain Robert
Robinson, S (Brecon and Radnor)


Bell, Lieut.-Col. W. C. H. (Devizes)
Gibbs, Colonel George Abraham
Samuel, Samuel (W'dsworth, Putney)


Bellairs, Commander Carlyon W.
Gilmour, Lieut.-Colonel Sir John
Sanders, Colonel Sir Robert Arthur


Benn, Capt. Sir I. H., Bart. (Gr'nw'h)
Glanville, Harold James
Sassoon, Sir Philip Albert Gustave D.


Betterton, Henry B.
Green, Joseph F. (Leicester, W.)
Scott, Leslie (Liverpool, Exchange)


Birchall, Major J. Dearman
Greene, Lt.-Col. Sir W. (Hack'y, N.)
Shaw, Capt. William T. (Forfar)


Boscawen, Rt. Hon. Sir A. Griffith-
Hacking, Captain Douglas H.
Smith, Sir Malcolm (Orkney)


Bowyer, Captain G. W. E.
Hailwood, Augustine
Sprot, Colonel Sir Alexander


Boyd-Carpenter, Major A.
Hamilton, Major C. G. C.
Stanier, Captain Sir Beville


Bridgeman, Rt. Hon. William Clive
Hannon, Patrick Joseph Henry
Stanley, Major Hon. G. (Preston)


Briggs, Harold
Harmsworth, C. B. (Bedford, Luton)
Stephenson, Lieut.-Colonel H. K.


Brittain, Sir Harry
Henry, Denis S. (Londonderry, S.)
Sugden, W. H.


Brown, Major D. C.
Hope, Lt.-Col. Sir J. A. (Midlothian)
Sutherland, Sir William


Bruton, Sir James
Horne, Sir R. S. (Glasgow, Hillhead)
Thomson, F. C. (Aberdeen, South)


Buckley, Lieut.-Colonel A.
Hotchkin, Captain Stafford Vere
Thomson, Sir W. Mitchell- (Maryhill)


Butcher, Sir John George
Hunter, General Sir A. (Lancaster)
Tryon, Major George Clement


Carr, W. Theodore
Jameson, John Gordon
Turton, Edmund Russborough


Cautley, Henry Strother
Kellaway, Rt. Hon. Fredk. George
Walters, Rt. Hon. Sir John Tudor


Chamberlain, Rt. Hn. J. A. (Birm. W.)
Kidd, James
Ward, William Dudley (Southampton)


Chamberlain, N. (Birm., Ladywood)
King, Captain Henry Douglas
Watson, Captain John Bertrand


Clay, Lieut.-Colonel H. H. Spender
Law, Alfred J. (Rochdale)
Weston, Colonel John Wakefield


Colvin, Brig.-General Richard Beale
Lindsay, William Arthur
Wheler, Col. Granville C. H.


Coote, Colin Reith (Isle of Ely)
Lloyd-Greame, Sir P.
White, Col. G. D. (Southport)


Cope, Major William
Locker-Lampson, Com. O. (H'tingd'n)
Williams, C. (Tavistock)


Davidson, J. C. C. (Hemel Hempstead)
Lyle, C. E. Leonard
Wills, Lt.-Col. Sir Gilbert Alan H.


Davidson, Major-General Sir J. H.
M'Lean, Lieut.-Col. Charles W. W.
Wood, Hon. Edward F. L. (Ripon)


Davies, Alfred Thomas (Lincoln)
Manville, Edward
Worthington-Evans, Rt. Hon. Sir L.


Davies, Thomas (Cirencester)
Moore, Major-General Sir Newton J.
Young, E. H. (Norwich)


Doyle, N. Grattan
Moore-Brabazon, Lieut.-Col. J. T. C.
Young, Sir Frederick W. (Swindon)


Elliot, Capt. Walter E. (Lanark)
Morrison, Hugh
Younger, Sir George


Evans, Ernest
Neal, Arthur



Eyres-Monsell, Com. Bolton M.
Newman, Sir R. H. S. D. L. (Exeter)
TELLERS FOR THE NOES.—


Falcon, Captain Michael
Nicholson, Reginald (Doncaster)
Colonel Leslie Wilson and Mr.


Falle, Major Sir Bertram Godfray
Parker, James
McCurdy.


Fildes, Henry
Parry, Lieut.-Colonel Thomas Henry

NEW CLAUSE.—(Alteration of Entertainments Duty.)

On and after the first day of August, nineteen hundred and twenty-one, in lieu of the entertainments duty imposed by Section one of the Finance (New Duties) Act, 1916, as amended by Section three of the Finance Act, 1917, Section eleven of the Finance Act, 1918, and Section seven of the Finance Act, 1919, there shall be charged, levied, and paid on all payments for admission to any entertainment as defined by the Act of 1916 an Excise duty at the following rates (namely):—

Where the payment, excluding the amount of the duty—



s.
d.


exceeds 1d. but does not exceed 2½d.
0
0½


exceeds 2½d. but does not exceed 5d.
0
1


exceeds 5d. but does not exceed 7½d.
0
1½


exceeds 7½d. but does not exceed 1s. 1d.
0
2


exceeds 1s. 1d. but does not exceed 2s. 1d.
0
3


exceeds 2s. 1d. but does not exceed 3s. 2d.
0
4


exceeds 3s. 2d. but does not exceed 4s.
0
6

s.
d.


exceeds 4s. but does not exceed 5s.
0
9


exceeds 5s. but does not exceed 7s. 6d.
1
0


exceeds 7s. 6d. but does not exceed 10s. 6d.
1
6


exceeds 10s. 6d. but does not exceed 15s.
2
0


exceeds 15s., 2s. for the first 15s. and 6d. for every 5s. (or part of 5s.) over 15s.—[Mr. Newbould.]

Brought up, and read the First time.

Mr. NEWBOULD: I beg to move, "That the Clause be read a Second time."
I am very reluctant indeed to occupy time at this hour, particularly because if I am to do justice to the case I am afraid it will take some considerable time. However, I must as briefly as I can put the essential points. It would be foolish of me to pretend that I am entirely disinterested in this matter, seeing that I am occupied in the industry concerned,
but I do claim to have given as much attention to the effect which my proposals will have on the revenue derived from the tax as I have to the effect which the tax will have on the industry itself. It is because I am satisfied, and convinced I can prove by arguments, that my proposals would increase the Revenue rather than decrease it that I am venturing to occupy the time of the Committee in putting them forward. The proposals themselves are nothing more than justice and equity demand, and they are devised in the light of knowledge and experience and forethought, and they are also based on facts and figures which are not disputed, which have been put before the Customs and accepted by them. In my opinion the proposals should be welcomed by the Chancellor of the Exchequer because they will, over a period of years, and a short period of years, enormously increase the revenue which he derives from this source. The Chancellor of the Exchequer, I know, will refuse the proposals on one ground only, that the Revenue will lose something this year, and he will say to the Committee: "I cannot afford to lose anything this year, be it only comparatively small." He probably will not tell the Committee, but I must tell the Committee, and I will try to convince him that if he did accept these proposals, over about three, four, or five years,—there is no question whatever, in my mind—and I can bear it out by figures and arguments—he would receive considerably more than he is now doing from this revenue.
The Chancellor of the Exchequer is going to get infinitely less this year than he got last year. He is going to lose revenue in any case, and mainly for this reason, not because of the general depression and the inability of people to spend money, but because by the taxes on cigars and champagne and so on the industry is over-taxed, prices of admission have to be raised to a higher standard than people will pay, and the consequent result is the number of attendances has fallen enormously. With regard to this question of the number of attendances, I can give a few very startling figures to the Committee. I will take twenty typical cinema theatres spread all over the country. I find that in these twenty theatres, of average seating capacity, in the year 1920 the
number of attendances was 1,350,000 less than in the year 1919. I now take the first twelve months of the year 1921 and I find that the number of attendances again fell as against 1920 by a figure which at the end of the year, if it maintained the same number of attendances, would add another 1,400,000 to the fall in 1920. That would mean that the attendances for the current year would be something like 2,700,000 less in these twenty ordinary typical theatres than in 1919. That means, of course, that the Exchequer is going to lose very heavily in the revenue derived from this tax. In 1919, when this decrease in attendances commenced, it synchronized exactly with the fact that the exhibitors found it necessary to put up their prices. They found it necessary to put up their prices, ever so little, in order to meet the increased cost of running these places, the increased price of films and many other things, and the fall in attendances started with the increase in price.
I would point out to the Committee that, owing to the nature of the incidence of this tax, the exhibitor is not at liberty to raise or lower his price by a small sum, such as ½d., 1d. or 2d., in order to meet the changing conditions—increase in cost or decrease in the ability of the public to pay. He is not able to make this very small increase without making, in addition to it, a very much heavier and larger proportional increase in the amount of the tax.
Let us take an instance. Suppose the price charged for admission, including tax, is 3d.; the tax is ½d. and 2½d. is the money retained by the exhibitor. Supposing now that the exhibitor says: "I can no longer afford to take people into my place at 3d.; I am going to increase the price to 4d." The tax is then increased by 100 per cent.; so that whereas the tax on 2½d. is ½d., the tax on 3d. is 1d., making 4d. inclusive, an increase in the tax of 100 per cent., just because the exhibitor has to put his price up ½d. because he can afford no longer to sell his seats at this price.
Take another charge. If you charge 4½d. for admission and add 1½d., the amount of the tax, you get a 6d. seat; 4½d. for the exhibitor and 1½d. for the Exchequer. If you say that you cannot afford that seat, if you want to make your 4½d. seat into a 5d. seat and add ½d. to the price of the seat, you have also to
add ½d. to the amount of the tax. Therefore, whenever we want to increase our prices ever so little—and they must be little if we are to retain the public—we have to add to the increase, we put on the increase in the tax, and thus we get the sum of these two increases, which makes the prices higher than the public will pay. What happens exactly is that the people who used to pay 6d., who used to go into the 6d. seats, no longer do so; they go into the 3d. seats; the people who used to go into the 9d. seats go into the 6d. seats; the people who used to go into the 1s. seats go into the 9d. seats, and so on. When you come to the much more expensive seats which you depend on for your profits, you find them empty, because people cannot afford to pay the price. That is the effect of the tax.
Before the War the cinema theatres in this country compared more than favourably with the cinema theatres in America, which is the great home of the cinema theatre. The theatres were as good in every respect. They were as large, as well-built, as well-ventilated, and in every way compared favourably with the American theatres. During the War we were unable to build, we were unable to enlarge, we were unable to improve our theatres. But film production at that time in America developed enormously, and made very rapid strides during the period of the War. Whereas before the War we had an entertainment of an hour or an hour and a-quarter, which cost us something between £25 or £30 or £60, making an entertainment which we could run through eight times in a day, we now have an entertainment which occupies two and a-half to three and a-half hours, an entertainment which we can only put to use three times or at the very outside four times a day, costing us five times the amount of money for the films which we show owing to the enormous development and improvement which has taken place in film production. We used to think that a 1,000-feet film was too long; in fact, before the War we very often turned down a film of 1,000 feet in length because it was too long. Now we cannot procure a film of any value at all under 5,000 feet, and our films run into 10,000 feet, and the film which cost £1,000 or £2,000 to produce before the War now costs £10,000, £20,000 or £100,000 to produce, and to hire that
film for one of our shows for two or three days frequently costs us £300.
1.0 A.M.
What I am trying to bring the Committee to is this, that whereas before the War these cinema theatres were admirably fitted in every way to the form of entertainment which we gave, and gave very profitably, to-day the cinema theatres are a great deal too small to hold the number of people to take the money to pay these enormous increases in the cost of running, the cost of programmes, the higher wages, the higher assessment, the higher cost of electric light, the higher cost of everything connected with the running of our entertainments. But there is one essential thing that we have to do if the industry is, to become in a promising condition. We must enlarge our theatres, and where we cannot enlarge our existing theatres we must build new theatres in their place. What in effect are my proposals? They amount to this, that in a range of prices—3d., 6d., 9d., 1s., 1s. 6d., and 2s.—if you fill one of each of that category of seats you receive a total of 6s. Out of that total of 6s. the Chancellor of the Exchequer takes by way of Entertainments Duty 1s. 3d. and leaves the exhibitor 4s. 9d. My proposals are very moderate. I am re-arranging the incidence of the Duty so that out of every 6s. instead of taking 1s. 3d. he should be satisfied with taking 1s., leaving us 5s. But you say "Threepence out of 6s. How can you meet the case you are putting to the Committee by what is so small? Your case seems absurd." I think the figures I have given in regard to the number of attendances show that we deal with vast numbers of people. Whilst 3d. in 6s. sounds very little indeed, when you come to deal with tens of millions of people you, will find it will very soon mount up to a considerable sum. I tell the Chancellor of the Exchequer that every penny of the concession which I am asking him to make us will come back through the rebuilding and enlargement of existing theatres and provide him with the revenue he expects to get from these duties. There are hundreds of these theatres which will go out of business unless he can make these concessions. Instead of next year receiving more revenue from the taxes of that industry he will get less because the
existing theatres cannot be enlarged. For the sake of a sum of money—I do not know at what he estimates the amount—for the sake of this sum of money, which is really small, he is going to sacrifice revenue for years to come, and it will take years to overcome the damage he will do to the industry unknowingly.
I must thank him for receiving a deputation in this matter, which I led myself and laid the case before him frankly. He rightly referred it to advisers at the Customs. I had three hours with the Customs authorities. They commenced by challenging my figures and ended by accepting them. They started by challenging my arguments and finished by stating there was a great deal in them. They said it was going to cost the Revenue money. I have cut out so many essentials that I cannot do justice to the case at this hour of the night, but I can assure the Chancellor of the Exchequer that I am absolutely correct in saying that unless he can make this concession he is going to lose millions of money during the next five years. One of his predecessors made a concession to the industry in 1918, which the Customs authorities said would cost the Exchequer £200,000. The whole of the concessions I then asked for would have cost £1,000,000. That concession increased the Revenue by over £1,000,000, and the only regret of the Chancellor of the Exchequer was that he did not give us the whole of the concessions. If he had given us the whole he would have increased the Revenue still more. We must enlarge our buildings and decrease the prices of admission. The revenue is going down rapidly, as I know it by having the figures for seventy cinema theatres every day. I know he is going to lose heavily this year, and every penny he gives back will go in capital expenditure. I hope he will consider this, and not do an injustice to an industry which has done its best to serve him in war and at all times of national crisis.

Mr. SEDDON: I wish to supplement and support the arguments that have been advanced by my hon. Friend. My wish is to call the attention of the Chancellor of the Exchequer to the fact that this duty was originally a war measure. Like many other war measures conditions have unfortunately made us continue them into peace. This, and similar war measures, are more irritating when
nothing is done to meet argument arising out of personal experience. It has been frankly stated that the Treasury may lose some small revenue this year, but I am also certain that it is an absolute fact that what would be lost by the operation of the Clause this year would be more than recouped in the years to come. After all the Chancellor of the Exchequer does not live from hand to mouth. That policy always brings its own penalties. In the case of champagne and cigars the prophecies of those connected with the trade came true and the Treasury had to relax the taxes after they had done almost mortal injury to the two industries.
A graduated scale would assist the cinema trade to be carried on in the coinage of the realm, which after all has some effect upon people's spending. The present basis makes for delay in handing coins. In this new Clause you will have 3d., 6d., 9d. and 1s. You may say that is only a small difference between the taxes. It makes a difference to the people when their spending power has been reduced. It used to be a great method of conducting trade by selling things for 1s. 11½d. because it did not seem as much as 2s. Exactly the same thing occurs if people want entertainment. When they can get it for 6d. instead of 7d. it makes a difference in breaking into a 1s. Under the present incidence of the Duty, because it breaks into the shilling of the person who would be going to the sixpenny seat it was doing an injury not only to the trade, but the Treasury as well. With reference to one part of the proposed scale I want to impress on the Chancellor of the Exchequer as a very serious consideration its effect on children's matinees. This is really a question of the poorest section of the community—the children of the working classes in the dense areas of population. In the pre-War days, as referred to by my hon. Friend, costs were low and it was within the power of the exhibitor and the owner of the cinema to give an entertainment at children's matinees for a penny, and although no profit was made it covered the costs. It was an enormous advantage to the poor in the large towns and cities, and these children of parents of limited means had the opportunity of getting pleasure, and education as well, and amusement from the cinemas. But with the increased costs, both in wages and in the raw
material, it is an impossibility for children's matinees to be given at a figure of a penny. Twopence might cover the bare costs, but if the duty is maintained at its present basis tens of thousands, probably hundreds of thousands, of the poorest children will be denied this source of entertainment and education because it would be impossible for the cinema proprietors to give matinees for children at a penny. Twopence would probably cover their costs, but no more.
I beg the right hon. Gentleman to realise that this is a form of tax that is going to help the Chancellor of the Exchequer more and more as the years roll by. Although the duty is a war measure, the majority of those who are affected by it recognise that it must continue for some considerable time. But, bearing that in mind, let him have a little vision for his successor. I hope it may not be next year or the year after, but the time will come when there will be a successor, and let him remember that he inherited the tax on cigars and champagne—a penalty inflicted by his predecessor—and let him have some little vision for his successor and not inflict on this industry an injury which means a reduction to the Treasury as well as an injury to the trade itself. I ask him to take that bigger vision, accepting the evidence we give. He said that he wanted to consult his advisers. Where do his advisers get their information from? Simply by sitting in their offices, speculating and laying down a hypothesis that if so-and-so happened last year, so-and-so must happen now, and without any relation to actual experience. This Schedule is the outcome of the experience of an industry that has not only given support to the Government and the country during the War, but is prepared to bear its fair share of the burden; out it wants the right hon. Gentleman to take that experience, which is in the interest of the Chancellor of the Exchequer as well as of the trade itself, against the mere speculations of his Departments. If ho takes the latter he would find that a mistake has been made and a grave injury has been done to a form of entertainment that brings joy and pleasure to multitudes of the people of this country.

Sir R. HORNE: I should like, in the first place, to say that I cannot really
accept the statement of my hon. Friend when he suggests that all of the information with which my advisers are able to supply me is that which they can find by sitting in their offices and conceiving for themselves some imaginative figures. That, I think the hon. Member who moved the Clause will agree, by no means describes what took place in connection with this matter. My advisers went thoroughly into the figures of the cinema entertainments, and they discussed with the hon. Gentleman himself what those figures represented and what might be achieved by adopting the proposals. I do not think there was very large disagreement between them in the end. I think there was not much dispute about the figures or what the results in money would be. Nor do I think there was any grave difference as to the arguments. But the result is that on the figures we should lose in a full year—not in this current year—something like £2,500,000.

Mr. SEDDON: Oh! That shows where they get their figures.

Sir R. HORNE: If the scale now suggested were adopted.

Mr. NEWBOULD: That is if the number of attendances remained the same as last year.

Sir R. HORNE: No doubt it is upon that basis. Of course we are suffering at present not merely from a general depression, but also from the experience of the coal stoppage. It cannot be expected that we are going to have anything like an ordinary year's revenue. Therefore my position is really more perilous than it would be. Undoubtedly the scale proposed would have a serious effect on the revenue to be drawn from cinema houses in the present year. My hon. Friend must accept that as the considered judgment of people who have had all the proper figures before them for forming a judgment.
On the general argument, I would like to point out to the Committee that we are just now having precisely the same proposition put to us by every trade and industry. It is said by each industry in turn: "If you go on taxing us to this extent you would be depriving us of those sums of money which we have been laying aside for development, and the less we are able to develop the less revenue you
will get in the future."That is the regular, stereotyped argument which industry always puts forward to any Chancellor of the Exchequer. No one can say to a nicety what really will happen. No one can say what the precise amount of money is which any industry will require in order to conduct its appropriate development, and in each case it is for the Chancellor of the Exchequer to balance as well as he can the possibilities. It would be foolish for him in one case to take more money than the industry can afford if it is going to kill the goose that lays the golden egg; on the other hand if he has to find enough revenue on which to carry on the country then he must get as much as he can without doing injury to the industry. These undoubtedly are the principles on which he must proceed. We are not satisfied, on the one hand, that the cinema industry is going to suffer so badly as those who represent the industry say. There is always a certain amount of exaggeration put forward in the case of any person who comes to the Chancellor of the Exchequer to ask for some remission of taxation. On the other hand the State undoubtedly, particularly in this year, cannot get along without

revenue which the present scale of taxation upon the cinema industry yields. Our difficulties grow greater every day instead of less. One would like to remit as much taxation as possible but we have to deal with facts and to confront the realities of the situation. So in dealing with them I cannot see that it is possible to make the changes which the mover of this Motion himself acknowledges would inevitably result in the reduction of the revenue which we should obtain from the cinema industry this year.

Mr. SEDDON: Two and a half millions.

Sir R. HORNE: That is the figure we have arrived at upon the best information we can get, and we must accept the information that you obtain after you have made sufficient investigation to satisfy yourself. Looking at all the facts it is impossible for us to do anything which would enable me to remit taxation upon the cinema industry, and accordingly to my great regret I cannot accept the Motion which my hon. Friend has made.

Question put, "That the Clause be read a Second time."

The Committee divided: Ayes, 9; Noes, 135.

Division No. 187.]
AYES.
[1.23 a.m.


Acland, Rt. Hon. Francis D.
Henderson, Major V. L. (Tradeston)
Wedgwood, Colonel Joslah C.


Barnes, Major H. (Newcastle, E.)
Holmes, J. Stanley



Benn, Captain Wedgwood (Leith)
Morgan, Major D. Watts
TELLERS FOR THE AYES.—


Entwistle, Major C. F.
Remnant, Sir James
Mr. Newbould and Mr. Seddon.


NOES.


Agg-Gardner, Sir James Tynte
Coote, Colin Reith (Isle of Ely)
Harmsworth, C. B. (Bedford, Luton)


Amery, Leopold C. M. S.
Cope, Major William
Hennessy, Major J. R. G.


Armitage, Robert
Davidson, J. C. C. (Hemel Hempstead)
Henry, Denis S. (Londonderry, S.)


Atkey, A. R.
Davidson, Major-General Sir J. H.
Hope, Lt.-Col. Sir J. A. (Midlothian)


Bagley, Captain E. Ashton
Davies, Alfred Thomas (Lincoln)
Hopkins, John W. W.


Baird, Sir John Lawrence
Davies, Thomas (Cirencester)
Horne, Edgar (Surrey, Guildford)


Baldwin, Rt. Hon. Stanley
Doyle, N. Grattan
Horne, Sir R. S. (Glasgow, Hillhead)


Balfour, George (Hampstead)
Elliot, Capt. Walter E. (Lanark)
Hotchkin, Captain Stafford Vere


Barlow, Sir Montague
Evans, Ernest
Hunter, General Sir A. (Lancaster)


Barnett, Major Richard W.
Eyres-Monsell, Com. Bolton M.
Jameson, John Gordon


Barnston, Major Harry
Falcon, Captain Michael
Jones, Henry Haydn (Merioneth)


Bell, Lieut.-Col. W. C. H. (Devizes)
Falle, Major Sir Bertram Godfray
Joynson-Hicks, Sir William


Bellairs, Commander Carlyon W.
Fildes, Henry
Kellaway, Rt. Hon. Fredk. George


Benn, Capt. Sir I. H., Bart. (Gr'nw'h)
Ford, Patrick Johnston
Kidd, James


Betterton, Henry B.
Forestier-Walker, L.
King, Captain Henry Douglas


Birchall, Major J. Dearman
Foxcroft, Captain Charles Talbot
Lane-Fox, G. R.


Boscawen, Rt. Hon. Sir A. Griffith-
Fraser, Major Sir Keith
Law, Alfred J. (Rochdale)


Bowyer, Captain G. W. E.
Fremantle, Lieut.-Colonel Francis E.
Lindsay, William Arthur


Boyd-Carpenter, Major A.
Gange, E. Stanley
Lloyd-Greame, Sir P.


Bridgeman, Rt. Hon. William Clive
Ganzoni, Sir John
Locker-Lampson, Com. O. (H'tingd'n)


Briggs, Harold
Gee, Captain Robert
Lyle, C. E. Leonard


Brittain, Sir Harry
Gibbs, Colonel George Abraham
M'Lean, Lieut.-Col. Charles W. W.


Brown, Major D. C.
Gilmour, Lieut.-Colonel Sir John
McNeill, Ronald (Kent, Canterbury)


Bruton, Sir James
Glanville, Harold James
Mallalieu, Frederick William


Buckley, Lieut.-Colonel A.
Goff, Sir R. Park
Manville, Edward


Butcher, Sir John George
Gould, James C.
Moore, Major-General Sir Newton J.


Carr, W. Theodore
Greene, Lt.-Col. Sir W. (Hackn'y, N.)
Moore-Brabazon, Lieut.-Col. J. T. C.


Chamberlain, Rt. Hn. J. A. (Birm, W.)
Gretton, Colonel John
Morrison, Hugh


Chamberlain, N. (Birm., Ladywood)
Hacking, Captain Douglas H.
Neal, Arthur


Clay, Lieut.-Colonel H. H. Spender
Hallwood, Augustine
Newman, Sir R. H. S. D. L. (Exeter)


Colvin, Brig.-General Richard Beale
Hamilton, Major C. G. C.
Ormsby-Gore, Hon. William


Conway, Sir W. Martin
Hannon, Patrick Joseph Henry
Parker, James


Parry, Lieut.-Colonel Thomas Henry
Sprot, Colonel Sir Alexander
Weston, Colonel John Wakefield


Pickering, Colonel Emil W.
Stanier, Captain Sir Beville
Wheler, Col. Granville C. H.


Pollock, Sir Ernest Murray
Stanley, Major Hon. G. (Preston)
White, Col. G. D. (Southport)


Pownall, Lieut.-Colonel Assheton
Steel, Major S. Strang
Williams, C. (Tavistock)


Pretyman, Rt. Hon. Ernest G.
Stephenson, Lieut.-Colonel H. K.
Wills, Lt.-Col. Sir Gilbert Alan H.


Purchase, H. G.
Sugden, W. H.
Wood, Hon. Edward F. L. (Ripon)


Raper, A. Baldwin
Sutherland, Sir William
Worthington-Evans, Rt. Hon. Sir L.


Rawlinson, John Frederick Peel
Thomson, F. C. (Aberdeen, South)
Young, E. H. (Norwich)


Roberts, Samuel (Hereford, Hereford)
Thomson, T. (Middlesbrough, West)
Young, Sir Frederick W. (Swindon)


Robinson, S. (Brecon and Radnor)
Thomson, Sir W. Mitchell- (Maryhill)
Younger, Sir George


Samuel, Samuel (W'dsworth, Putney)
Tryon, Major George Clement



Sanders, Colonel Sir Robert Arthur
Walters, Rt. Hon. Sir John Tudor
TELLERS FOR THE NOES.—


Scott, Leslie (Liverpool, Exchange)
Ward, William Dudley (Southampton)
Mr. McCurdy and Colonel Leslie


Shaw, Hon. Alex. (Kilmarnock)
Watson, Captain John Bertrand
Wilson.


Shaw, Capt. William T. (Forfar)




Question put, and agreed to.

NEW CLAUSE.—(Exemption of sewers from income tax.)

(1) Income tax shall not be charged in respect of a sewer vested in a local authority in the United Kingdom:

Providing that the foregoing exemption shall not extend to any rent payable or other annual payment to be made by the local authority in respect of the sewer.

(2) In this section—
The expression "sewer" means a sewer maintained by a local authority in pursuance of their statutory duties in relation to the public health;
The expression "local authority" means a public body having power under any enactment relating to the public health to construct and maintain sewers.—[Mr. Leslie Scott.]

Brought up, and read the first time.

Mr. LESLIE SCOTT: I beg to move, "That the Clause be read a Second time."
This is simply to remove what is an admitted anomaly that has arisen out of the inicidence of judicial decisions and has resulted in underground sewers which are essentially public property in character being treated as income-earning properties. The whole of the local authorities of the country are agreed about it, and I believe the Government agree to the Clause.

Sir R. HORNE: I accept this Clause.

Captain W. BENN: I am slightly interested in this, because I believe that the authorities concerned with these matters in Scotland act under rather different laws from those in England. I am informed, for example, that the authority which is called the Leith Water Purification Board would not be included in the definition of a local authority as laid down in the Clause. All I ask the Chancellor of the Exchequer to do is to carry out between now and the Report stage what is obviously intended, namely, to give an authority of the kind the same
advantages which he is now proposing to give to other local authorities.

Sir R. HORNE: The Leith Water Purification Board is a statutory authority, and comes within the terms of the proposed Clause.

Captain BENN: It is under a local Act.

Sir R. HORNE: I will look into the matter before the Report stage.

Clause read a Second time, and added to the Bill.

NEW CLAUSE.—(Exemption of superannuation fund from Income Tax in certain cases.)

The income of any fund formed for the purpose of providing superannuation for employés, where the employers' contributions to such fund are definitely alienated 60 as to belong to the fund absolutely, shall be entitled to exemption from tax under Schedules A, C, and D.

Provided that any superannuation allowance received by any person from such fund shall be regarded as income assessable for tax in the hands of the recipients.—[Mr. Leslie Scott.]

Brought up, and read the First time.

Mr. LESLIE SCOTT: I beg to move, "That the Clause be read a Second time."
This relates to a small point that I think will involve no sacrifice to the revenue, and it would certainly meet the views of a very large number of persons concerned in superannuation funds. The law at the present time is that employers subscribing to superannuation funds are allowed to deduct in practice the amount of their contributions from payments for Income Tax, and the same applies in the case of men who are subscribing to superannuation funds in cases where they have to pay Income Tax. But by a curious anomaly, the fund itself, if it
Makes an income, is obliged to pay Income Tax on it. I have had very strong complaints, for instance, from various funds in Liverpool and elsewhere, and I would ask the Chancellor of the Exchequer if he can see his way to give sympathetic consideration to this suggestion between now and the Report stage, and inform me if he can see his way to accept something on the lines of my Clause, in order that it may be incorporated on the Report stage. My Clause is exactly in the words advised by the Royal commission on Income Tax.

Sir R. HORNE: I certainly undertake to do what my hon. and learned Friend suggests—namely, to give further consideration to this Clause between now and the Report stage and to inform him as to what I shall be able to do when that stage arrives. As matters stand at the present time, I could not agree to the Clause in its wide terms as here proposed. My information is that already most of what my hon. Friend desires is covered by the practice of the Inland Revenue Department. But in so far as there may be some hardship arising from some part of the fund being caught, I shall undertake to consider that before the Report stage.

Mr. L. SCOTT: I beg to ask leave to withdraw the Clause.

Motion and Clause, by leave, withdrawn.

NEW CLAUSE.—(Relief in respect of welfare requirements.)

Where a person has in any trade carried on by him, either solely or in partnership, devoted any part of his profits (not exceeding one pound per annum per head of the workpeople employed by him on the average during the year) to structural alterations or additions to meet welfare requirements, he may claim that such expenditure shall, as far as may be, be deducted or set off against the amount of profits or gains on which he is assessed under Schedule D in respect of that trade. The term "person" shall include firms, partnerships, limited liability companies, and corporations.—[Colonel Wedgwood.]

Brought up, and read the First time.

Colonel WEDGWOOD: I beg to move, "That the Clause be read a Second time."
This Clause is one of some substance and importance. The Committee will be aware that during the last five or six years there has been a great movement
in all our factories in the direction of providing facilities and accommodation for what is known as welfare work. The building of rooms for meals and for recreation, the visiting of the houses of the various workers in the factories, and all this welfare work has been quite a recent development in England, and it has been met with great favour by the Government; in fact, a great deal of this welfare work was stipulated for during the War by the Government. So far, a certain number of factory owners and companies have taken up this welfare work with avidity, and have really done their best by it. On the other hand, certain other factory owners have not done very much in the welfare work direction. It is eminently desirable in the interests of good relations between employers and employed, as well as in the interests of the better health of the working classes, that this welfare work should be definitely encouraged in every possible way, and that those employers who really mean to do their duty should be encouraged to do it. Till now the real difficulty has been the initial expense of building dining rooms, recreation rooms, small cottage hospitals, or small buildings in the factory for treating accident cases. The Government has met us on the question of current expenses involved.
As I am informed, only the expenditure on the upkeep of welfare work in factories and workshops is at present allowed as a deduction from profits when considering Income Tax under Schedule "B." That is a step in the right direction, but hitherto there has been no allowance made for capital expenditure, and it is the capital expense which stops welfare work being started. It would really have been more in the interests of the progress of this welfare work if there had been special assistance in starting by means of allowing a deduction of capital expenditure rather than of maintenance. What we now want to do is to press on the Government the urgent necessity of treating money spent on putting up buildings for welfare work as a legitimate deduction from profits before Income Tax is calculated. There are two new Clauses on the Paper, the one I have drafted and another later on drafted by the hon. Member for Moseley (Mr. Hannon). Though both amount in practice to the same thing, his may be better drafted, and I am not at all anxious for the kudos of mine. It is true
that perhaps my Clause involves a larger measure of relief to the factory owner, whereas the Amendment of the hon. Member for Moseley involves less immediate loss to the taxpayer, but I am quite indifferent as to which form of words is adopted. It is however time that the Committee and the Government considered whether this definite step ought not to be taken to assist this useful work. Practically speaking, what we suggest is on similar lines to what the House has always given to charities. It is only fair to consider that welfare work is a legitimate charity for the factory owner. It is not compulsory; it is only his charitable desire to get on well with his workers and look after their health that leads him to make this expenditure. It seems to me on all fours with charitable expenditure. Ever since 1818 charities have been exempt from Income Tax, and I submit that this is exactly a parallel case and that we have a precedent behind us in asking the Government now to consider whether welfare work should not receive the same kind of treatment as charities receive.

Mr. N. CHAMBERLAIN: I am sure every Member of the Committee will have full sympathy with the objects my hon. Friend has in view, but I hope that the Government will consider this matter rather seriously. It would be a mistake to subsidise capital expenditure of the kind suggested in the Amendment. I think the hon. Gentleman takes an entirely wrong view of the way in which expenditure of this kind should be regarded. An enlightened employer looks upon welfare work as part of the legitimate expenses of his business. He finds in it not merely scope for his philanthropic ideals, but he finds that it is good business; he gets his return from capital expenditure in a better feeling and better work. Those with whom I have been associated have spent considerable sums of money in welfare work, and they did it in that light and did not ask the Government for subsidies.
I would like to point out another danger which my hon. and gallant Friend (Colonel Wedgwood) seems to have overlooked, that when the employers have got this subsidy or relief from taxation for capital expenditure on work which was originally intended to be devoted to welfare work, there is nothing to prevent
them from diverting it from that purpose hereafter and using it for other purposes. I know that during the War a firm took on a very large canteen for the benefit of their workpeople, perhaps not exactly in response to a Government suggestion, but the Government hoped that they would set up a canteen. The circumstances were rather special. It was a time of activity in munition-making, and large numbers of people migrated into the big towns in order to take part in Government work. In this particular case the directors, when they put up this canteen, were very well aware that after the War they would probably be employing fewer people, or that the people they would employ would not be the emigrants, but people living in the town and in the neighbourhood of the work. Therefore, they deliberately designed their canteen so that when the War was over it could be used as a machine shop, and to-day that building is no longer used as a canteen, but is ready to be used as a machine shop when trade justifies it.

Colonel WEDGWOOD: That would be covered by the Clause of the hon. and gallant Member for Moseley (Mr. Hannon).

Mr. N. CHAMBERLAIN: It would not be covered by the Clause of my hon. and gallant Friend (Colonel Wedgwood), and I am not certain that it would be covered by the Clause of the hon. and gallant Gentleman the Member for Moseley. If any relief is to be given in cases of this kind it must be made quite certain that the purposes for which the relief is given are the purposes for which the building is intended, and if you are going to give relief to such an extent I do not see how you can get it back again if the building is used for some other purpose.

Mr. SEDDON: On a point of Order. If this new Clause be disposed of, would it also dispose of the Clause standing in the name of the hon. Gentleman the Member for Moseley, because there are two separate points in these two Clauses.

The DEPUTY-CHAIRMAN (Sir E. Cornwall): Yes; that new Clause would be covered by this Motion.

Mr. SEDDON: Then I should like to say a few words on this Clause. The hon. Gentleman who spoke last seemed to make a general attack from an isolated
case. I am quite sure that, on reflection, he will not think that ought to be the guiding principle when you are giving your attention to an agency which has been admitted or which is admitted to be in the interests of the workers of the country. I would like to ask him what would happen if the companies he referred to had paid it in wages instead of putting up buildings? There would have been no question about it then. What is wanted is to level up the bad employers and to say, "Here is some little inducement for you to get with the good employers," if they have not done it of their own free will. It is recognised now that the welfare of those engaged in industry should be the concern of those who employ them. We have got beyond that stage among all employers—at all among the best employers—that workpeople are mere things to be taken on or turned off according to the exigencies of particular industries. They are beginning to understand that they are human beings and as human beings that the relationship in business should be the highest possible. No agency will conduce more favourably to harmony between capital and labour than the fact that employers are doing something towards improving the amenities and the means of recreation and all that goes to making life enjoyable by means of this welfare agency. This small relief would be no great drain on the Exchequer. It is not a subsidy, but an encouragement to employers to go on in the good work. I ask the Financial Secretary to the Treasury to take this matter into serious consideration. If he cannot give us a reply to-night, we are prepared to wait until the Report stage, but a large number of employers in this country would be encouraged in the good work, and we want to assist them in improving the relationship between capital and labour.

Mr. HANNON: I am sure that every hon. Member is in sympathy in promoting welfare work throughout industrial organisations in this country. I have had the opportunity this evening of exchanging views on this subject with the Chancellor of the Exchequer, and I am quite satisfied that his sympathy and the sympathy of the Financial Secretary to the Treasury are just as strong as that of my hon. Friend and myself for the continued promotion of this work.
They have promised that actual expenditure involved in carrying out welfare work in factories in this country will be carefully considered in assessments for Income Tax, and if a guarantee is given this evening that that practice will be continued and that the fullest consideration will be given to every application made where welfare work is concerned, I would suggest to my hon. and gallant Friend that he should withdraw his Amendment and I shall also withdraw mine.

Mr. PRETYMAN: Does that mean that there will be administrative discretion as to whether people are to be taxed or not? Surely, this House must settle that question.

Mr. H. YOUNG: With what was said by the hon. and gallant Member for New-castle-under-Lyme (Colonel Wedgwood) as regards the benefit of this work, I imagine that no Member of the Committee will disagree. It is one of the most interesting and promising new departures in the relations between employer and employed and in the development of industrial life. I think that I am not going too far when I say that it always has been the policy of this Government, and always will be its policy, to encourage and promote the development of welfare work of this sort in every way that is consistent with the administration of the law as it exists and with the principles which underlie our system of taxation. What is the actual state of affairs? There are two possible views with regard to welfare outlay. There is the view that it is outlay for the sake of business and that in that sense capital expenditure of this sort ought to be looked upon as capital put back into business. If that is so, I do not think that my hon. and gallant Friend the Member for Newcastle-under-Lyme will disagree that it would be quite inconsistent with the whole structure of the Income Tax as at present administered, and, further, that it would be inconsistent with the principles of sound taxation, that these exemptions should be given in favour of actual capital expenditure for welfare purposes. On the other hand, you may argue that this ought not to be looked upon as capital put back into the business, but as voluntary benevolent expenditure.
I believe myself, and I am sure many Members will agree, that this is only a very partial aspect, if true. But even so, according to our recognised prin-
ciples of Income Tax administration there would be no claim for any allowance for expenditure of that sort. On either ground it is, I fear, impossible to allow the allowance suggested in this Amendment in respect of capital expenditure for welfare purposes. It has been rightly said that there is no true difference in principle between this Clause and the Clause further down the paper to the same effect. It must be clear that there can be no difference between one Clause which allows actual capital deduction and another which allows a recurring reduction in respect of the interest of the same sum of capital. At the present time no ordinary principles of Income Tax law and administration of Income Tax allowances would meet, under our present system, these suggested allowances. But for all current expenditure for maintenance and upkeep in respect of welfare work—there is no question of increase or extension of Income Tax law—these expenses for upkeep and maintenance are allowed as a deduction for expenses before arriving at taxable income. This is recognised to be a useful and benevolent form of expenditure, and I certainly am of opinion that in applying the existing rules to this particular expenditure the attitude of the administration should be a sympathetic one, and should not take a hostile view of expenditure of this sort. That certainly has been the attitude of the Inland Revenue in the past. There is no difficulty in saying that the same sympathetic attitude will be maintained.

Colonel WEDGWOOD: I am afraid we have not got very much out of this Amendment. It seems to me there are different schools of thought on this. It has been said that this is really expenditure which every wise employer, looking at it from a purely financial point of view, ought to undertake. That is the view of fair thinking employers, but when you come to the get-rich-quickly employer then we have somehow to induce him to join the scheme. We must also remember that we know-that expenditure which improves the race is remunerative. We know that expenditure on education is remunerative and yet we refuse it as a nation because of the serious financial position. The second rate employer refuses to pay money for welfare work because of the serious financial position. The Financial Secretary to
the Treasury says that this had the sympathy of the taxing authorities in the past. I cannot think it was so. We would never have brought this Amendment forward if the late Chancellor of the Exchequer had consented to receive a deputation from the welfare organisation. There has not been much sympathy in the past and I hope before the next Budget there will be a different spirit shown towards this welfare work. I cannot see any reason why they should not be allowed to approach the Chancellor of the Exchequer. The Amendments have been put down in the dark because it is very difficult for private Members to draft Amendments when there is no discussion between the Chancellor of the Exchequer and the organisation which wants an Amendment.

2.0 A.M.

Mr. T. THOMSON: I have a somewhat similar Amendment on the Paper, and I submit that there is another point of view: that of the interest of the community as a whole, and the health of the community. I submit, even from the narrow financial point of view of the Treasury, that if you encourage expenditure on these lines you improve the general health of those workers and lessen their claims under the National Health Insurance on the Ministry of Health and all these things will really benefit the public, the Treasury, and the State as well as the employer and the individual, from a chargeable point of view. Therefore he would not be making a strain if in the interest of the Treasury as a whole he gave rather extended sympathy to the proposals which have been made.

Mr. SEDDON: The hon. Gentleman in charge of the Bill has said that the point of view of the Treasury has always been sympathetic. That is not my experience. The difficulties have been increased and even the employers who would willingly do it have been retarded because of the Treasury. Could the hon. Gentleman give an indication that instructions will be given to the representatives of the Treasury to deal with this matter in the same sympathetic spirit that he has himself expressed? Sympathy or help is like mustard without beef. It is not sympathy that we want, but an expression of that sympathy in works and good deeds as far as his Department is concerned. The next point is that his Department refused to meet those who speak for the welfare
associations. So far as I am concerned, if we get an assurance that between now and the next Budget he will receive a deputation from these people and hear their side of the case then my opposition will be withdrawn.

Colonel WEDGWOOD: Cannot we get some statement? I do not want to force a Division.

Mr. YOUNG: I cannot give an undertaking on behalf of my right hon. Friend, who is not in the House, but if the hon. Member will take it from me, I shall be happy to give it, and to meet the deputation.

Motion and Clause, by leave, withdrawn.

NEW CLAUSE.—(Exemption of certain entertainments from Entertainments Duty.)

(1) Notwithstanding anything contained in the Finance (New Duties) Act, 1916, and the Finance Act, 1917, or the Finance Act, 1919, Entertainments Duty shall not be charged on payments for admission to any entertainment where the Commissioners are satisfied—

(a) that the entertainment is provided by a society, institution, or committee for the purpose of encouraging or promoting the interests of agriculture, housing, transport, art, or any general industry; and
(b) that the entertainment is an exhibition of the goods or articles represented by the society, institution, or committee providing such entertainment, and that no extraneous entertainment which would but for the provisions of this Section be subject to Entertainments Duty is provided in connection with such exhibition; and
(c) that the net profits of such entertainment are devoted to the promotion and encouragement of the general interests and objects of the society, institution, or committee holding the entertainment, and are not and will not be distributed by way of dividend to any members of such society, institution, or committee.

(2) The Commissioners may make Regulations for carrying the provisions of this Section into effect.—[Sir W. Joynson-Hicks.]

Brought up, and read the First time.

Sir W. JOYNSON HICKS: I beg to move, "That the Clause be read a Second time."
I have four new Clauses on the Paper, but I do not propose to move those which I know are subject to controversy, but will eliminate the first and the last. I
am proposing to put the Clauses down on the Report stage, and will move the second which deals with the exemption of certain trade exhibitions from the Entertainments Duty. The object of this is to ensure that trade exhibitions which are really organised for the purpose of improving the trade of the country, and are not merely social entertainments, and where no profits are made personally but are all handed over to the trade organisation, and where no such extraneous entertainments such as cockfights or bands are given—that these should be exempted from the Entertainments Duty. I have included in this Clause agricultural shows, though I believe that agricultural shows have recently been favourably treated by the Chancellor of the Exchequer in this matter. In order to make that quite clear that agricultural shows are legally exempted from the Entertainments Duty I include them. The Clause is the result of a deputation which I introduced to the late Chancellor of the Exchequer. He received it quite favourably, and gave us an assurance that the proposal I now embody in the Clause should be considered favourably by the Exchequer. I hope my hon. Friend who represents the Exchequer will be able to accept the Clause as it stands or will move it in some similar form on the Report stage.

Mr. YOUNG: Most careful consideration has been given to the Clause as now moved by the hon. Member, and my right hon. Friend has come to the conclusion that it is necessary that something should be done in this direction. It is essential always to promote the interest of industrial expansion and development, and among the ways of doing it none can be more in the spirit of the present times than the promotion of such exhibitions as this. But there are one or two particulars in which difficulty will be found in settling the actual wording. If my hon. Friend will be content with an assurance that a Clause will be put down on Report embodying the principle of his Clause perhaps he will withdraw it.

Sir W. JOYNSON-HICKS: I accept the suggestion the hon. Gentleman has made, and will look forward to seeing the new Clause.

Motion and Clause, by leave, withdrawn.

NEW CLAUSE.—(Amendment of s. 13 of 10 & 11 Geo. V., c. 18.)

(1) The proviso to Section thirteen of the Finance Act, 1920 (which provides for quarterly licences in respect of any vehicles which are chargeable with duty as mechanically-propelled vehicles), shall have effect as if for the words "other than a cycle or a tram-car or a vehicle on which a duty of five shillings is chargeable under this Section for one quarter of the year only beginning on the first day of January, the twenty-fifth day of March, the first day of July, or the first day of October, and in the case of any licence so taken out the duty shall be thirty per cent, of the full annual duty" there were substituted the words "for such periods of the year as the Minister of Transport may by regulations prescribe, and in the case of any licence so taken out the duty shall be such amount as shall be proportionate to the full annual duty having regard to the period for which the licence is taken out."

(2) The Minister of Transport may make regulations generally for the purpose of carrying this Section into effect, and such regulations may prescribe the fee, if any, or fees to be paid in respect of any such licences, and may specify the class of vehicles to which such licences apply.—[Sir W. Joynson-Hicks.]

Brought up, and read the First time.

Sir W. JOYNSON-HICKS: I beg to move, "That the Clause be read a Second time."
This Clause also, I hope, will receive the favourable assent of the Ministry of Transport who, I think, is in charge of the matter. Under the present taxation of motor cars there is a provision that licences may be granted quarterly. A curious effect of this has been that the trade of selling motor cars has developed into a quarterly trade. Men who are about to buy a motor car, say, in the month of February or the beginning of March, will not buy it until the turn of the quarter, the 1st April. The same thing happens at the end of the year. This is detrimental both to the trade and the Treasury. The Treasury is kept out of a certain amount of duty and the traders are kept with a large amount of stock on their premises which they are unable to sell. The proposal I make to the Committee is that this should be reconsidered and that the Ministry of Transport should make Regulations enabling licences to be granted, not merely quarterly but monthly, or for shorter periods. The question of the period I leave to the Government; but I would like the assurance that the spirit of this Clause also is accepted by the
Government and that the hon. Gentleman will on the Report stage, if he cannot accept the exact words of my Clause, bring up a Clause which will carry out the objects I have in view.

The PARLIAMENTARY SECRETARY to the MINISTRY of TRANSPORT (Mr. Neal): I think I can meet the hon. Baronet sufficiently to enable him to withdraw his Clause. The Clause which he has moved is not one which the Minister could accept. There are certain conditions which I desire to make clear. The first is that I think that any licence which might be granted should not under any circumstances overlap the calendar year. There are reasons why no licence should be in existence beyond the 31st of December. The next question raised in the form of the Clause is that the licence fox a proportion of the year is said to be only a proportion of the annual sum. A quarterly licence at present is charged at a somewhat higher rate, 30 per cent. for the quarter instead of 25 per cent. Then there are one or two other matters about which, perhaps, I need not elaborate at this time, but I will endeavour between now and the Report stage to put some Clause down which I think will meet the hon. Baronet.

Sir W. JOYNSON-HICKS: I am much obliged to my hon. Friend. I hope he will get as near as possible to the proportionate amount of the duty. But I must not look a gift horse in the mouth and perhaps he will let me see the Clause as soon as he has drafted it. In these circumstances I ask leave to withdraw.

Motion and the Clause, by leave, withdrawn.

Sir W. JOYNSON-HICKS: I do not wish now to move my new Clause for the proposed Amendment of 10 & 11 Geo. V., c. 72, s. 9, but I reserve the right to put it down on the Report stage.

NEW CLAUSE.—(Reduction of Excise Duty on table waters.)

That in lieu of the duty of Excise of four-pence per gallon payable on sweetened or fermented table waters, and of the duty of Excise of eightpence per gallon payable on other table waters, there shall, as from the tenth day of May, nineteen hundred and twenty-one, be charged, levied, and paid duties of half the above amounts respectively.—[Colonel Wedgwood.]

Brought up, and read the First time.

Colonel WEDGWOOD: I beg to move, "That the Chairman do report Progress, and ask leave to sit again."
This new Clause is to cut down the Duty on table waters by one-half. I should like to protest first of all against having to discuss it at this time in the morning. All the Members who have put their names to this Amendment except myself are absent. The Clause has excited great interest in the country. We have all been deluged with resolutions about it, and the whole work that has been done in order to arouse interest in this question will all be thrown away if we proceed to discuss it at this time of night. It is now quarter past two, and the House is tired and the Chancellor of the Exchequer has gone to bed. [HON. MEMBERS: "No, no, he is here!"] I think the time has now arrived when the Chief Whip, whom I am very glad to see present, might consider whether he cannot let us off. There are still seven pages of Amendments to get through. The whole of the party which I represent is absent and I do submit, and the Chancellor of the Exchequer and the Financial Secretary of the Treasury should realise that we are the guardians of the public interest, that legislation at this time of the night is contrary to the public interest. We have been on this Finance Bill, roughly speaking, half a day. At 8.15 we were interrupted by the Motion for the Adjournment and for two hours earlier in the afternoon we had another discussion spatchcocked in. It is not fair to take the whole of the second day on the Finance Bill involving an enormous amount of new legislation at the small hours of the morning. I know the Government are very anxious to get through all the new Clauses to-night and

to reserve for Friday the Schedules. I think they would really do better if they took the remainder of the new Clauses and the Schedules on Friday. I think I had better move first to report Progress and ask leave to sit again in order that we can have the subject properly discussed. Cannot we have an answer from the Government as to how long we are to go on?

Sir R. HORNE: We propose to sit until we have finished the new Clauses, leaving over until Friday the discussion of the Schedules. My view about that has not altered in the course of the evening.

Colonel WEDGWOOD: Is it that you have not been here. [HON. MEMBERS: "Withdraw!"] We have lost all the working part of the day and we are trying to discuss it in the absence of the Labour party. I think any reasonable Leader of the House would say that it is impossible to carry on the Debate much longer. It is perfectly understood on these occasions that the Chief Whip lays down a principle early in the day. Then there is always a Motion for the Adjournment about half-past eleven which the Chief Whip always refuses. There is another one about quarter past two which the Chief Whip generally accepts. I do submit that now is the opportunity not to lead this Parliament with quite so heavy a hand and I think we might come to an agreement which will shorten our discussions in the long run and enable us to get home to bed and to discuss this matter in a reasonable spirit later in the week.

Question put, "That the Chairman do report Progress, and ask leave to sit again."

The Committee divided: Ayes, 7; Noes, 129.

Division No. 188.]
AYES.
[2.19 a.m.


Acland, Rt. Hon. Francis D.
Glanville, Harold James
TELLERS FOR THE AYES.—


Barnes, Major H. (Newcastle, E.)
Morgan, Major D. Watts
Colonel Wedgwood and Mr.


Barton, Sir William (Oldham)
Newbould, Alfred Ernest
Trevelyan Thomson.


Benn, Captain Wedgwood (Leith)




NOES.


Agg-Gardner, Sir James Tynte
Bellairs, Commander Carlyon W.
Buckley, Lieut.-Colonel A.


Amery, Leopold C. M. S.
Benn, Capt. Sir I. H., Bart. (Gr'nw'h)
Butcher, Sir John George


Armitage, Robert
Betterton, Henry B.
Carr, W. Theodore


Atkey, A. R.
Birchall, Major J. Dearman
Chamberlain, Rt. Hn. J. A. (Birm. W.)


Bagley, Captain E. Ashton
Boscawen, Rt. Hon. Sir A. Griffith-
Chamberlain, N. (Birm., Ladywood)


Baird, Sir John Lawrence
Bowyer, Captain G. W. E.
Clay, Lieut.-Colonel H. H. Spender


Baldwin, Rt. Hon. Stanley
Boyd-Carpenter, Major A.
Colvin, Brig.-General Richard Beale


Balfour, George (Hampstead)
Bridgeman, Rt. Hon. William Clive
Conway, Sir W. Martin


Barlow, Sir Montague
Briggs, Harold
Coote, Colin Reith (Isle of Ely)


Barnett, Major Richard W.
Brittain, Sir Harry
Cope, Major William


Barnston, Major Harry
Brown, Major D. C.
Curzon, Captain Viscount


Bell, Lieut.-Col. W. C. H. (Devizes)
Bruton, Sir James
Davidson, J. C. C. (Hemel Hempstead)


Davies, Thomas (Cirencester)
Horne, Edgar (Surrey, Guildford)
Robinson, S. (Brecon and Radnor)


Doyle, N. Grattan
Horne, Sir R. S. (Glasgow, Hillhead)
Samuel, Samuel (W'dsworth, Putney)


Elliot, Capt. Walter E. (Lanark)
Hotchkin, Captain Stafford Vere
Sanders, Colonel Sir Robert Arthur


Evans, Ernest
Hunter, General Sir A. (Lancaster)
Seddon, J. A.


Eyres-Monsell, Com. Bolton M.
Jameson, John Gordon
Shaw, Hon. Alex. (Kilmarnock)


Falcon, Captain Michael
Jones, Henry Haydn (Merioneth)
Shaw, Capt. William T. (Forfar)


Falle, Major Sir Bertram Godfray
Joynson-Hicks, Sir William
Sprot, Colonel Sir Alexander


Ford, Patrick Johnston
Kellaway, Rt. Hon. Fredk. George
Stanier, Captain Sir Beville


Forestier-Walker, L.
King, Captain Henry Douglas
Stanley, Major Hon. G. (Preston)


Foxcroft, Captain Charles Talbot
Lane-Fox, G. R.
Steel, Major S. Strang


Fraser, Major Sir Keith
Law, Alfred J. (Rochdale)
Stephenson, Lieut.-Colonel H. K.


Fremantle, Lieut.-Colonel Francis E.
Lindsay, William Arthur
Sugden, W. H.


Gange, E. Stanley
Lloyd-Greame, Sir P.
Sutherland, Sir William


Ganzonl, Sir John
Locker-Lampson, Com. O. (H'tingd'n)
Thomson, F. C. (Aberdeen, South)


Gee, Captain Robert
Lyle, C. E. Leonard
Thomson, Sir W. Mitchell- (Maryhill)


Gibbs, Colonel George Abraham
M'Lean, Lieut.-Col. Charles W. W.
Tryon, Major George Clement


Gilmour, Lieut.-Colonel Sir John
McNeill, Ronald (Kent, Canterbury)
Walters, Rt. Hon. Sir John Tudor


Goff, Sir R. Park
Mallalieu, Frederick William
Ward, William Dudley (Southampton)


Gould, James C.
Manville, Edward
Watson, Captain John Bertrand


Green, Joseph F. (Leicester, W.)
Moore, Major-General Sir Newton J.
Weston, Colonel John Wakefield


Greene, Lt.-Col. Sir W. (Hackn'y, N.)
Moore-Brabazon, Lieut.-Col. J. T. C.
Wheler, Col. Granville C. H.


Hacking, Captain Douglas H.
Neal, Arthur
White, Col. G. D. (Southport)


Hailwood, Augustine
Newman, Sir R. H. S. D. L. (Exeter)
Williams, C. (Tavistock)


Hamilton, Major C. G. C.
Ormsby-Gore, Hon. William
Wills, Lt.-Col. Sir Gilbert Alan H.


Hannon, Patrick Joseph Henry
Parker, James
Wood, Hon. Edward F. L. (Ripon)


Harmsworth, C. B. (Bedford, Luton)
Parry, Lieut.-Colonel Thomas Henry
Young, E. H. (Norwich)


Henderson, Major V. L. (Tradeston)
Pickering, Colonel Emil W.
Young, Sir Frederick W. (Swindon)


Hennessy, Major J. R. G.
Pollock, Sir Ernest Murray
Younger, Sir George


Henry, Denis S. (Londonderry, S.)
Pownall, Lieut.-Colonel Assheton



Holmes, J. Stanley
Pretyman, Rt. Hon. Ernest G.
TELLERS FOR THE NOES.—


Hope, Lt.-Col. Sir J. A. (Midlothian)
Purchase, H. G.
Colonel Leslie Wilson and Mr.


Hopkins, John W. W.
Roberts, Samuel (Hereford, Hereford)
McCurdy.

Colonel WEDGWOOD: I beg to move, "That the Clause be read a Second time."
The duty on sweetened table waters has now got beyond the point at which it brings any increase in revenue and just because the taxes on cigars and champagne were reduced because they tended to reduce consumption and not to increase revenue so we now ask that the tax on sweetened and unsweetened table waters should also be reduced. Last year there were 10,000,000 gallons less of aerated waters used in this country than in 1919, and that is due very largely to the exceedingly heavy taxation. The present duties are 4d. a gallon on sweetened and 8d. a gallon on unsweetened table waters, but in addition to these it must be remembered that the raw material of these aerated waters is also taxed very heavily. Sugar is the principal raw material and that bears extremely heavy taxation at the present time. Roughly speaking, the ordinary bottle of table waters is at present taxed at a rate of 3d. per dozen bottles by this tax and 4d. by the sugar and spirit duties, or ½d. per bottle. The result is that a pint of mineral waters now costs more than a pint of beer owing to the heavy taxation. The additional cost is made up because the cost of the raw materials, apart from taxation, has gone up more than the raw material in any other industry. Sugar has gone up from £15 a ton to £140 a ton since the War. That increase of nearly
1,000 per cent., of course, hits the industry very hard and makes the cost of ginger beer extremely expensive. Generally speaking, the price has been put up to such an extent that the consumption is falling off and the revenue is losing cash. The main point, therefore, is that there is dual taxation, the heavy taxation on the raw material and the more heavy taxation on the finished product. The effect of these taxes has been such as to reduce consumption and we say that just as the taxes on champagne or cigars was reduced when it was found that it reduced consumption, so in this case the tax should also be reduced in order to benefit consumption, and particularly that form of consumption which all of us wish to see increased at the expense of alcoholic beverages.

Sir R. HORNE: It is interesting to observe the enthusiasm which the hon. and gallant Member takes in the cause which to-night he has been advocating, but I am afraid that his enthusiasm has not carried into his speech that accurate analysis of the trade which has been done in these particular waters in the course of the last year. He lamented that there had been a great falling off in the consumption of table waters. I think he said about 11,000,000 gallons.

Colonel WEDGWOOD: Ten millions.

Sir R. HORNE: It really is nearer 11,000,000, but he did not investigate the
particular character of table waters which suffered diminution. That interesting part of the investigation would have disclosed that fact that while sweetened table waters had diminished very greatly in consumption, unsweetened had kept up, and, indeed, had rather increased in consumption. Unsweetened table waters, of course, are apt to be mixed with things of a stronger character, and undoubtedly the nature of the last summer had something to do with it. The hon. and gallant member directed attention to the fact that there was a double tax on the sweetened variety. I am afraid that he failed to notice the simple cause of that fact—that the ingredients which go into the making of the sweetened table water are already taxed, so that the tax on the water itself is less than that put on the unsweetened variety. The complaint which he has made is entirely unfounded, because the sugar which goes to make the sweetened table water is taxed. He said that the tax per gallon on the sweetened table water was only 4d., as against 8d. on the unsweetened variety. There is no ground, in the circumstances, for that complaint. Again, he compared the position of the sweetened with that of beer. The table water, at the highest, is only taxed at 8d. per gallon, as against 11d. for the lightest form of beer. There seems to be very little justification—

Colonel WEDGWOOD: Do you prefer people to drink beer to these table waters?

Sir R. HORNE: The lightest form of beer is not of such a character as in any way to be detrimental to the health and welfare of the race. I think it is not too much to ask those who prefer the table waters to contribute a little to the taxation of the country. The amount which would be lost if the hon. and gallant Member's proposal were carried would be something over £500,000, and I do not think that the Committee should be asked, in these circumstances, to forgo this measure of revenue, in order to satisfy a demand which I do not think is insistent in this country.

Colonel WEDGWOOD: I do not think that the right hon. Gentleman sufficiently realises the change in the position. Before the War the manufacturer of nonalcoholic beverages was lightly taxed compared with the taxation of beer and
alcoholic beverages. Now that is all changed. You have a heavy tax on mineral waters. The right hon. Gentleman argues that they should be taxed as heavily as alcoholic beverages.

Sir R. HORNE: I did not.

Colonel WEDGWOOD: In previous years it was assumed that non-alcoholic beverages should be less taxed than alcoholic beverages, in order to encourage the consumption of one and discourage the consumption of the other. Apparently, that theory of taxation has been abandoned, but, personally, I prefer the old system of taxation, which had some idea of guiding the public taste in the right channels. It seeks to increase the consumption of beer and to decrease the consumption of non-alcoholic beverages.

Question, "That the Clause be read a Second time," put, and negatived.

Colonel WEDGWOOD: I said "Aye!" Why did not the "Ayes" have it?

The CHAIRMAN: I did not hear the hon Member. I could not say that the "Ayes" had it, because there were no "Ayes" to have it. I am in some doubt about the next Amendment, because it appears to me to require the Exchequer to part with some of the money it has already obtained, but I shall be glad to hear the explanation of the hon. Member for Canterbury.

NEW CLAUSE.—(Amendment of S. 39 of Finance Act, 1920.)

In order to remove doubts it is hereby declared that the increase in the Stamp Duty imposed by Section thirty-nine of the Finance Act, 1920, on statements as to capital of companies did not and shall be deemed not to have applied in any case where the Treasury are satisfied that—

(1) the new issue of capital would in ordinary course have been made before the increased rate of Stamp Duty became payable, and that
(2) such issue was postponed by reason only of compliance with the request of the Chancellor of the Exchequer for the postponement of private appeals for capital in view of the new issue of Treasury Bonds, and for no other reason,

and in any such case the amount of duty paid in excess of five shillings per centum shall be repaid accordingly.—[Mr. B. McNeill.]

Brought up, and read the First time.

Mr. R. McNEILL: I beg to move, "That the Clause be read a Second time."
I confess that I had reason to anticipate that you might be doubtful about this Clause being in order as it stands on the Paper. I am going to ask you to allow me to move it in the amended form, a form in which the Government would recognise it as a familiar friend. If I move it in that form I think I shall be in order, because it will avoid the objection to which you referred.

The CHAIRMAN: I still have certain doubts, but as they are doubts and not certainties, I give the hon. Member the benefit of them.

Mr. McNEILL: I am quite certain my right hon. Friend is prepared to accept this Clause, because it is not a question here of taking away from him anything in the way of revenue, or a very inconsiderable amount. It really is only to give him an opportunity to repair what was an obvious oversight in the Finance Bill of last year. Let me explain shortly. Early in January, 1920, the Chancellor of the Exchequer was about to issue a Government Loan, and I think it was in the form of bonds. In order to keep the line clear for the Government Loan a request was issued from the Treasury—I think it was on 15th January—urging companies and other firms who might be contemplating making new issues of capital to refrain from doing so for a short time for patriotic motives, and in order not to interfere with the Government loan. In point of fact, so far as I have been able to ascertain, something like £20,000,000 of capital, or thereabouts, was issued in total disregard to the appeal which had been made to the public by the Chancellor of the Exchequer, and this £20,000,000 of capital took advantage of a very favourable time in the market.
A small number of persons and companies, thinking themselves bound under the national circumstances, responded to the appeal which had been made by the Chancellor and refrained from making issues of capital which they had in contemplation. By doing so, they sacrificed a very favourable moment for making their issues. But they were prepared to do that and take their chance of finding another favourable period. Before they
were able to make their issues the Government put up the duty from 5s. to 20s., and the consequence was that this small number of patriotic concerns incurred the extra taxation, amounting in all to somewhere about £100,000. Under these circumstances when the Finance Bill was before the House, an Amendment practically identical with that which is down now, was put on the Paper by Lord Carson. Owing to some misunderstanding, Sir E. Carson, as he then was, was under the impression that the then Financial Secretary to the Treasury, now President of the Board of Trade, had accepted this Amendment. Sir E. Carson was not in the House when his Amendment was called and the consequence was that it fell through. The Chancellor of the Exchequer cannot stand up in this Committee and pretend he was going to take advantage of the response made to the appeal of his predecessor, but if there is a difficulty in accepting the Amendment in its present form I presume it would be open to the Government to put down, in more practical form, an Amendment on the Report stage. If the right hon. Gentleman is prepared to do that I am perfectly willing to agree.

Sir R. HORNE: I very readily agree with the view that my hon. Friend has put before the Committee to the effect that where the Government can be assured that people have acted upon its suggestion and suffered, something ought to be done. If one can come clearly to the conclusion that there were firms and companies so adversely affected in the issue of capital at this particular time then, I think, the Treasury would recognise an obligation to deal with the matter. I do not think it is possible to deal with the matter in a particular form of legislation, for reasons which are obvious when they are stated. My predecessor in office, who was in fact involved in this matter, very strongly took the view which he expressed to some people who felt they had been adversely affected, that it was impossible to find any appropriate remedy to the position. The facts are that the Chancellor of the Exchequer indicated a desire that the line should be kept clear for the Government loan. The subscription list of that loan terminated on 28th February, and there were six clear weeks between that date and the time when it was announced in the Budget speech that there would be an increase in the Stamp Duty on further issues.
Accordingly, if there was any corporation or company that had a desire to make an issue at that particular time they had quite an appreciable period in which to make such an issue. Then there occurs the difficulty of deciding who should be relieved—if there are any who deserve it. It may be said there were some companies in the position that the six weeks available were not suitable. After all, the Chancellor of the Exchequer has to determine whether they have a real claim or not. It is very difficult for the Chancellor of the Exchequer to determine upon which ground he can give the relief. After all there is only the word of the people involved. He may be suspicious that the claim was unfounded, and the word of one company would be as good as another. We are hampered by the situation. But I am perfectly willing to do this. I would be glad to have a meeting with the hon. Member to discuss the matter further and, if it is possible on the Report stage, I should be very glad to take such action as may recommend itself, to me after full consideration of the whole matter. At the present time the situation is clogged with so many difficulties that I cannot give an assurance that I can ever see a way for a remedy.

Mr. McNEILL: May I just say a word in reply? To begin with, so far as the difficulty that the Treasury could not tell what concerns had or had not had to postpone their issue, I do not believe that any difficulty of that sort would arise. I should have thought myself that in any well-managed business there would be some record of it on the minutes of the board of directors. I have in my hand a report of one concern—the Imperial Banking Corporation—of which Lord Inchcape is chairman—which states that the prospectus "would appear this week but for the request of the Chancellor of the Exchequer that the new issue should be held over till Government Bonds were out of the way." I should imagine that there are not a great many cases of that kind. I think there is very little doubt that there would be some record on the minutes. At any rate, as my Amendment states, "where the Treasury are satisfied" I shall be perfectly content to leave it to my right hon. Friend to satisfy himself, and am certain that he will deal fairly with it. But when he tells me that his predecessor holds the opinion—which he apparently is inclined to endorse—that every claim that
these concerns might have is forfeited because they do not take advantage of a particular interval of time, I do not think that that is a position that he can take up. It amounts to this, that the Chancellor of the Exchequer, having made this appeal to the patriotism of capital concerns, is willing to penalise them if they did not make their issue at a time when it would have been impossible for them to do so, and because they did not do so they are to suffer, while those concerns who metaphorically told him to go to the devil have not been penalised. I think that is a temper which the Government ought to be very chary indeed of raising in the money market. After all, it is surely of the highest possible importance that the Exchequer and the City should keep on good terms. As the right hon. Gentleman has offered to meet me, I shall be very proud to do so; but I hope that he will allow me to be accompanied by gentlemen who may be directly concerned—as I am not—I am only bringing the matter forward as one of public importance—with the issues of capital to which I have referred. I shall then be very grateful to accept his offer. But I do not like to part from the Amendment altogether without some very strong ground for hope that a case so strong as this is will not be allowed for any reason to be passed over. Therefore, I reserve to myself the right to put down this Amendment in the same or some amended form on the Report stage, when I hope there will be a better opportunity than there is at 3 o'clock in the morning.

3.0 A.M.

Mr. KIDD: Might I suggest to the Chancellor of the Exchequer that one way of getting out of the difficulty of distinguishing between the real and the unreal claims might be that in those cases of which he has had notice within a reasonable time that his request had been complied with and the issue held back, that in these cases consideration should be given in order to exempt them from any outlay they would otherwise incur? The previous Chancellor of the Exchequer acknowledges this particular case; therefore there should be no difficulty about proof. Surely the Government will find some means of relieving these people of the great extra expense which otherwise they would be put to. With regard to the point that there was some delay. The Chancellor spoke in the
month of January and the issue took place in the month of April. I hope the Chancellor of the Exchequer will feel that the responsibility rests with the Government of devising ways and means of exempting from this big outlay a firm which was so loyal and patriotic as to take the risk which they did at the request of the then Chancellor of the Exchequer.

Sir W. JOYNSON-HICKS: I should like to ask the Chancellor of the Exchequer whether he can give a little more favourable answer? Some few years ago I had some amount of legal experience in the issue of new capital. A company does not make up its mind to issue new capital all in the air. There are consultations with lawyers, brokers, and the whole paraphernalia must be gone through. If there is one thing in this world of legal proof it is that a company had made arrangements to issue capital on a certain date and to postpone its issue on account of the request of the Chancellor of the Exchequer. It would be the easiest thing in the world, it seems to me, to prove where a fraudulent claim has been made and where a claim is genuine. There are letter books and books of every kind. I have no interest in any case whatever, but I think the Chancellor of the Exchequer should make a little more favourable reply. It does seem a very hard case which has been put before the Committee.

Mr. PRETYMAN: I did not quite gather whether the Chancellor did give an undertaking to do something. We have had the statement made that a very important company, at the request of the Exchequer, delayed an issue until April, and the effect of that was that the Exchequer demanded a tax. The limitations, I understand, must be rigid.

Sir R. HORNE: I am afraid I have entirely failed to convey to the Committee the action which I was proposing to take. It is perfectly obvious that the Treasury cannot pay away money unless the evidence is perfectly clear. What I, ventured to suggest was that I should be given the opportunity of really arriving at some particular knowledge about this matter. I can give no pledge before I am made thoroughly aware that there is a case which deserves such consideration. I will promise to make investigation
with the help of the Mover of the Motion, and that is as far as I can pledge myself. The Committee have jumped to a conclusion and think I ought to have gone farther. I am not prepared to jump to a conclusion. I am prepared to give my best consideration to the matter. I am not prepared now to say that a case is made until I see the evidence.

Mr. McNEILL: I want to clear this matter up. I shall be delighted to meet my right hon. Friend and discuss the matter, but for what particular purpose I There are two things to be done. A case for amending the Bill either in this form or in some similar form is made out. What I understand my right hon. Friend is asking is that we should give him evidence as to whether some particular firm or company does or does not come within the terms of the Amendment. That is quite a different thing. After all, what sort of evidence does my right hon. Friend want? I have given him conclusive evidence, at all events, of one concern where the issue was delayed at the request of the Exchequer, and where in point of fact they have to pay 20s. tax instead of 5s. What more does he want? My right hon. Friend wants evidence that there are other concerns that come within the terms of the Amendment. That I quite understand. Although I am quite ready to meet him, I do not myself see that it is going to forward matters very much as far as the Amendment is concerned. I still think that he might give me an undertaking that, after discussing with me what the particular terms of the Amendment might be, he will at all events amend the Bill so as to cover these particular cases, which amount altogether to about £100,000. The particular case I mentioned to him is about £37,000. If he will do that, I will ask leave to withdraw the Amendment. I do not want to put the Committee to a Division at this time of the morning. When we discuss the matter again on Report it may be necessary to come to a Division; I hope it will not, but I hope my right, hon. Friend will make the Amendment in the Bill that has been indicated.

Sir R. HORNE: I still fail to understand my hon. Friend. The Amendment to the Bill can only be necessary if there are cases which it is intended to cover. That is exactly what I want to be satis-
fied about. Personally I have not seen the evidence of the case. If there is no case, then it is not necessary to have the Amendment in the Bill. I want to be satisfied that there is some case that requires such a Clause. After all, I do not think I am asking too much.

Mr. McNEILL: I may tell my right hon. Friend I am now satisfied, if he will make an Amendment if I can prove that there is a case. After the kind way in which my right hon. Friend has met me, I will ask to withdraw the Amendment.

Motion and Clause, by leave, withdrawn.

NEW CLAUSE.—(Excess Profits Duty.)

For the purpose of removing doubts it is hereby declared that any person who is at the end of the final accounting period the owner of a trade or business subject to Excess Profits Duty shall be entitled to claim in respect of that duty relief for losses in respect of forward contracts entered into before the fixed date.—[Mr. Leonard Lyle.]

Brought up, and read the First time.

Mr. LYLE: I beg to move, "That the Clause be read a Second time."
There are many people very interested in this question. It should not really be necessary to move this new Clause which is framed for the purpose of removing doubts as to the position of firms who have made forward contracts, and the position they will be in with regard to taking these forward contracts into account in making up their statement in the final accounting period. It is an ordinary business principle and an accepted principle of book-keeping that if you want to know your true state of affairs at a given time you must look at your liabilities, and your forward contracts are to a certain extent your liabilities. I do not ask that this Clause should be put in as a concession, but as a mere matter of common justice. I am told from various deputations that have seen the Chancellor of the Exchequer on this question that his attitude is not sympathetic, and that that is due to the state of the Exchequer finances. That ought not to enter into this question at all. The state of the Exchequer finances is one thing, but in dealing with Excess Profits Duty what is expected of the Government is common fairness. No auditor would argue that you were repre-
senting a true state of affairs if you do not take your forward contracts into account. Most firms in the past have done this with regard to Income Tax and Excess Profits Duty. In the past that did not matter, because Excess Profits Duty was being carried on, and if a firm wrote down their forward contracts and the market turned it righted itself during the next accounting period, and it is only because Excess Profits Duty is being done away with that the question arises at all. I would like just to make two points.
If the Chancellor of the Exchequer cannot grant this concession I would ask him if he does not think that it is exceedingly unfair that the Government should have taken advantage of forward contracts made by firms when the Excess Profits Duty was introduced, and now, at the end of the accounting period, that they should allow firms to bear their losses on forward contracts. The Government took advantage of the fat thing when it was there, and now at the end of the accounting period they propose to leave the firms in the lurch.
Another point is this. The forward contracts were taken into account when arriving at the basic account for the standard year for Excess Profits Duty, thereby reducing the standard of profit on which Excess Profits Duty was based in succeeding years. If profits were taken into account so also should losses. It is no argument to say that the state of the national finances is such that the Government cannot give away anything. Those who are putting forward this new Clause are not asking for any concession but for what they consider is mere common justice, and what is an accepted principle in ordinary bookkeeping.

Sir R. HORNE: I do not think that my hon. Friend entirely apprehends what the situation is with regard to the relief he asks. The concession which has been made by the Treasury with regard to the valuation of stocks is because various firms terminated the accounting period for Excess Profits Duty at varying dates, some of them towards the end of last year, some of them in the beginning of this year and down until 4th August. It has been felt to be inequitable that there should be all these varying dates, and accordingly in order to meet the wishes of large bodies of traders who came to me
upon the subject we agreed that no matter when the accounting period of any firm finished they should be entitled to have a revaluation of their stocks down to 31st August of this year with a view to putting any losses or depreciation suffered during that period against the excess profits upon which they had paid duty during their accounting period.
That, as far as it went, was satisfactory to the bodies of business men whom I saw. What is now put forward is the suggestion that any contract entered into prior to the end of the accounting period should also come into this review, to the effect that though goods have not been delivered prior to the end of the accounting period, nevertheless if the market value of the goods in the interval had fallen that depreciation should be put against the duty which had been paid as excess profits during the accounting period. I shall deal with that matter in a moment, but I should like to say at once that the theory which is put forward by the hon. Member that in some way at the beginning of Excess Profits Duty advantage was taken of forward contracts is an entire error. There was no room for taking advantage of them. At the beginning of the Excess Profits Duty profits made on goods delivered of course became liable because they were within the accounting period. What is now proposed is something entirely different. No advantage could be taken at that time of forward contracts because it was not until the Excess Profits Duty began that there was any question of account, and the Excess Profits Duty was in existence so long that all goods purchased before it began were necessarily delivered during the accounting period. No question arose such as the hon. Gentleman suggests. He is now proposing that contracts entered into before the end of the accounting period, although no loss has been sustained, should, if there has been a market depreciation in prices, have that depreciation taken into account in founding a claim for a set-off against the duty which has been paid while the Excess Profits Duty has been in vogue. I wish the Committee to understand exactly what that means. In the first place, it means that, although the period has expired on which the business is subject to a duty in profits, if profits are realised, and that therefore the State can have no
claim on those excess profits, if there is a loss on that accounting period, the State must nevertheless be liable. That, obviously, is a very one-sided transaction, but, in the second place, the loss that is anticipated may never arise. A man enters into a contract for goods delivered over a space of a year or two years. Owing to the state of the market he may say at the end of the accounting period that the goods are worth less than he agreed to pay, notwithstanding that, over the time they were delivered to him, he realised a profit on them, and yet, in the interval, the State has to record a depreciation and make that a set-off against the duty which has been paid for excess profits while these were being earned in the time when the Excess Profits Duty was in vogue.
There is another important point. The hon. Gentleman entirely failed to notice that very often forward contracts are covered by forward sales, and if this Motion were adopted you might have a business firm claiming in respect of depreciation in the value of goods in the market and getting it under this Clause, while at the same time the person who bought those goods in forward contract had sold the goods at a price higher than that at which he contracted to buy them. I submit to the Committee that if this Clause were put into the Bill there would be no doubt at all that very many cases might arise in which an entirely inequitable claim could be sustained. Let me add this before I sit down. Everyone who knows anything about the way in which the accountants treat the accounts knows that forward contracts, such as my hon. Friend dealt with in his speech, are never treated as coming into the year in which the contract was made, but the actual entry is made when the delivery takes place.

Mr. LYLE: Very often—it has been done in the case of my own firm in the case of the Income Tax returns, for instance—the Income Tax return is made up by many firms, taking into account forward contracts for the purpose of Income Tax.

Sir R. HORNE: I confess that I can scarcely conceive what my hon. Friend says to be so without some explanation. It is quite possible if you have made forward contracts by way of purchase, and also made a sale of the goods in a period
over which the Income Tax operates, that in that case you would take into account what has been done. But where the goods still await delivery, and nothing has been done over that accounting period, to me it is quite out of the usual course of business if that is brought into the year in which delivery takes place. If ray hon. Friend investigates the matter he will find that what I have said is right. I have pointed out many reasons for the rejection of this Clause. I submit that the Clause should not be accepted.

Mr. LYLE: Is the Chancellor of the Exchequer going to give us any consideration on the following Amendments. There is an Amendment which stands in the name of the hon. Member for Lime-house (Sir William Pearce) which deals with the same subject. I should like to know whether there are certain safeguards to be given—

Sir R. HORNE: While I have given every consideration to this matter, and to the suggestions in this particular Clause, I do not hope to be able to indicate any acceptance of it.

Mr. LYLE: Then I cannot withdraw this new Clause. The Chancellor of the Exchequer has made a very able statement, but, at the same time, it is perfectly clear that as regards forward contracts you want to know your position at a given date. You cannot absolutely ignore your forward contracts. For the sake of argument, let us say that the accounting period ends at the end of June. A firm may have contracted forward contracts for material which is going to take from May to September—a purely forward contract. If they have got the stuff in their factories they are quite

entitled to write off any loss which there may be in that forward contract. A firm may make a contract, and they may find that it is a bad contract for them. They go to the seller and ask that the contract shall be cancelled. The seller says: "For a certain sum I will cancel the contract and re-sell." There is a loss. That loss on goods arriving in the succeeding six months is a charge on the business. When the particular six months are ended, payment is made. The Chancellor of the Exchequer has made out a very clever case, but he has camouflaged the whole position. He must admit that it is a perfectly sound business proposition to look at your liability. The Government had the advantage of forward contracts made by firms during the War. Whether the goods came in or not did not matter. The Government had the big advantage of a rising market. What does it come to? If a firm's accounting period is at the end of August, and if they have got in a lot of their goods for the succeeding six months before August, they can write off the lot. But if there has been a contract, and those same goods have not arrived, they cannot take those circumstances into account. A firm which gets a seller to cancel a contract in return for the payment of a lump sum down can get rid of its liabilities in that way, but the individual who has got goods to come is not allowed any relief at all. It is a matter of common justice that some relief should be given to firms in respect of forward contracts.

Question put, "That the Clause be read a Second time."

The Committee divides: Ayes, 13; Noes, 100.

Division No. 189.]
AYES.
[3.33 a.m.


Atkey, A. R.
Hannon, Patrick Joseph Henry
Pickering, Colonel Emil W.


Balfour, George (Hampstead)
Holmes, J. Stanley



Doyle, N. Grattan
Manville, Edward
TELLERS FOR THE AYES.—


Foxcroft, Captain Charles Talbot
Newbould, Alfred Ernest
Mr. Leonard Lyle and Captain


Ganzoni, Sir John
Ormsby-Gore, Hon. William
Bowyer.


Gould, James C.
Parry, Lieut.-Colonel Thomas Henry



NOES.


Agg-Gardner, Sir James Tynte
Benn, Capt. Sir I. H., Bart. (Gr'nw'h)
Chamberlain, Rt. Hn. J. A. (Birm. W.)


Amery, Leopold C. M. S.
Betterton, Henry B.
Chamberlain, N. (Birm., Ladywood)


Armitage, Robert
Birchall, Major J. Dearman
Colvin, Brig.-General Richard Beale


Bagley, Captain E. Ashton
Boscawen, Rt. Hon. Sir A. Griffith-
Conway, Sir W. Martin


Baird, Sir John Lawrence
Boyd-Carpenter, Major A.
Coote, Colin Reith (Isle of Ely)


Baldwin, Rt. Hon. Stanley
Briggs. Harold
Cope, Major William


Barlow, Sir Montague
Brown, Major D. C.
Curzon, Captain Viscount


Barnett, Major Richard W.
Bruton, Sir James
Davidson, J. C. C. (Hemel Hempstead)


Barnston, Major Harry
Buckley, Lieut.-Colonel A.
Davies, Thomas (Cirencester)


Bell, Lieut.-Col. W. C. H. (Devizes)
Butcher, Sir John George
Elliot, Capt. Walter E. (Lanark)


Bellairs, Commander Carlyon W.
Carr, W. Theodore
Evans, Ernest


Eyres-Monsell, Com. Bolton M.
Joynson-Hicks, Sir William
Shaw, Capt. William T. (Forfar)


Falcon, Captain Michael
Kellaway, Rt. Hon. Fredk. George
Sprot, Colonel Sir Alexander


Falle, Major Sir Bertram Godfray
King, Captain Henry Douglas
Stanler, Captain Sir Beville


Ford, Patrick Johnston
Lane-Fox, G. R
Stanley, Lieut.-Col. Hon. George F.


Forestier-Walker, L.
Law, Alfred J. (Rochdale)
Stephenson, Lieut.-Colonel H. K.


Fremantle, Lieut.-Colonel Francis E.
Lindsay, William Arthur
Sugden, W. H.


Gibbs, Colonel George Abraham
Lloyd-Greame, Sir P.
Sutherland, Sir William


Gilmour, Lieut.-Colonel Sir John
Locker-Lampson, Com. O. (H'tingd'n)
Thomson, F. C. (Aberdeen, South)


Glanville, Harold James
McNeill, Ronald (Kent, Canterbury)
Thomson, T. (Middlesbrough, West)


Goff, Sir R. Park
Mallalieu, Frederick William
Thomson, Sir W. Mitchell- (Maryhill)


Green, Joseph F. (Leicester, W.)
Moore-Brabazon, Lieut.-Col. J. T. C.
Tryon, Major George Clement


Greene, Lt.-Col. Sir W. (Hackn'y, N.)
Neal, Arthur
Walters, Rt. Hon. Sir John Tudor


Hacking, Captain Douglas H.
Newman, Sir R. H. S. D. L. (Exeter)
Ward, William Dudley (Southampton)


Hailwood, Augustine
Parker, James
Weston, Colonel John Wakefield


Harmsworth, C. B. (Bedford, Luton)
Pollock, Sir Ernest Murray
Wheler, Col. Granville C. H.


Henderson, Major V. L. (Tradeston)
Pownall, Lieut.-Colonel Assheton
White, Col. G. D. (Southport)


Hennessy, Major J. R. G.
Pretyman, Rt. Hon. Ernest G.
Wills, Lt.-Col. Sir Gilbert Alan H.


Holbrook, Sir Arthur Richard
Purchase, H. G.
Young, E. H. (Norwich)


Hope, Lt.-Col. Sir J. A. (Midlothian)
Roberts, Samuel (Hereford, Hereford)
Young, Sir Frederick W. (Swindon)


Hopkins, John W. W
Robinson, s. (Brecon and Radnor)



Home, Sir R. S. (Glasgow, Hillhead)
Samuel, Samuel (W'dsworth, Putney)
TELLERS FOR THE NOES.—


Hotchkin, Captain Stafford Vere
Sanders, Colonel Sir Robert Arthur
Colonel Leslie Wilson and Mr.


Hunter, General Sir A. (Lancaster)
Seddon, J. A.
McCurdy.


Jameson, John Gordon
Shaw, Hon. Alex. (Kilmarnock)



Question, "That the Clause be read a Second time," put, and agreed to.

NEW CLAUSE.—(Spirits in Hospitals.)

Section four of the Finance Act, 1918 (which provides for the reduction and allowance of duty in respect of spirits used in medical preparations or for scientific purposes), shall apply also to spirits used in hospitals on prescription, while Section seven, Sub-section (1), of the Finance Act, 1920, shall not apply to wines supplied on prescription in hospitals, and the Commissioners of Customs and Excise may make regulations for carrying this provision into effect.—[Mr. Lyle.]

Brought up, and read the First time.

Mr. LYLE: I beg to move, "That the Clause be read a Second time."
I moved this Clause last year on behalf of the hospitals and I am afraid the late Financial Secretary to the Treasury was fearful of what might happen to spirits in hospital once the cork had been taken out of the bottle. But I am putting this forward this year because there is a different Chancellor of the Exchequer and he comes from across the border. I am hopeful he will be slightly more sympathetic and less fearful of what may happen when the cork does come out of the bottle. The hospitals have to pay the full spirit duty—which is very heavy—and we are all very sympathetic with hospitals. During the War the Red Cross hospitals used to get their spirits at a much reduced duty, and all that I am asking is that the hospitals, which are so badly off just now, should be allowed this small concession.

Mr. H. YOUNG: As stated by the hon. Member who moved the Amendment, this is a proposal which has been put forward more than once before, and it has never been possible to receive it favourably from the point of view of the revenue.
A considerable concession has been made to hospitals in regard to exemption on spirits actually used in medical prescriptions. This goes a little further. The great objection would be that it would constitute a very serious breach of the control of the Inland Revenue over the use of spirits. I think, if my hon. Friend who moved the Amendment were acquainted with some of the opinions of hospital authorities which have been prominently brought before me, he would find many responsible authorities who were reluctant that the hospital authorities should undertake such difficult responsibilities as those which he proposes. It is regarded by a responsible body of opinion that the danger of abuse which would exist would not compensate the hospitals for the benefit they would receive pecuniarily from this exemption. It is for these reasons, both in the interests of the revenue and of the hospitals themselves that it has never been possible to accept this particular recommendation, and for the same reason it is not possible to accept them on the present occasion.

Mr. LYLE: I do not desire to divide the Committee on this occasion. But the Financial Secretary has stated that if I were a little more acquainted with the history and the working of hospitals I should find that there was reluctance to undertake the responsibilities proposed. I would like to say that I have a considerable acquaintance with the work of hospitals.

Mr. YOUNG: I had not intended to convey any impression of that sort. I know the hon. Gentleman is very well acquainted with all aspects of hospital work, and I was accepting his authority;
but some opinions are expressed more vocally than others, and there is this opinion. It may not be the opinion of the majority, but still it is an opinion entitled by its intrinsic merits to some weight.

Mr. LYLE: I accept that, but the British Hospitals Association quite approve of this Amendment. I desire to withdraw it.

Motion and Clause, by leave, withdrawn.

Mr. HOLMES: On a point of Order. Is not my new Clause to amend 10 and 11 Geo. V., c. 18, s. 52, in order?

The CHAIRMAN: This is, I understand, an exemption from Corporation Profits Tax. I think we dealt with that on Clause 40 yesterday. One or two proposed exemptions were discussed, and the present one is therefore out of place here.

Mr. HOLMES: I understood it would be in order here.

The CHAIRMAN: I am afraid I cannot take cognisance of that. Subject to what Mr. Speaker may say, it would be in order on the Report stage, and the difficulty of it being out of place would not then arise.

Mr. HOLMES: I had an Amendment down on the Clause. I understood that it would be in place here, and therefore gave notice that I would not move my Amendment earlier.

The CHAIRMAN: I much regret if that was the intimation given. The undertaking given to the hon. Gentleman then would hold good on the Report stage.

NEW CLAUSE.—(Amendment of s. 32 of Finance Act, 1896.)

From and after the passing of this Act the word "seventeen" shall be substituted for the word "thirty" where that word appears in Section thirty-two (Redemption of Land Tax) of the Finance Act, 1896, and the said Section shall be read and have effect in all respects accordingly.—[Sir B. Stanier.]

Brought up, and read the First time.

Captain Sir B. STANIER: I beg to move "That the Clause be read a Second time."
We find that under the Finance Act, 1896, if you want to redeem the Land Tax you have to give thirty times the sum assessed, and we move that it should
be 17 instead of 30. The reason of that is this. In the Tithe Act under which we are now working, the tithe has been redeemed at 17 years. If you can redeem tithe at 17 years, we contend that you should not be charged thirty times the sum assessed for the Land Tax.

Sir E. POLLOCK: I think there is a certain amount of confusion in saying that the present time system or number of years purchase applicable to tithe redemption ought to apply in the case of the Land Tax. No one knows better than the hon. and gallant Member that this question of tithe redemption was settled by the Act of 1896 and that whereas up to that time the redemption of the Land Tax stood at about37 years it was reduced by the Act of 1896 down to 30 years. I can understand what my hon. Friend and those in whose names this Amendment stands desire to do. They want to suggest now that inasmuch as tithe redemption has been reduced to 17 years, so by parity of reason you should apply a similar number of years to the redemption of the Land Tax. But I am quite certain that my hon. Friends will agree that you cannot by parity of reasoning say the Land Tax and tithe are equivalent. The Land Tax is called a tax, and no doubt originally it was imposed as a tax upon the land. But it stands in a very peculiar position. It is, perhaps, one of the oldest impositions upon the land but I think the right way in which to deal with it, particularly by the method of collection of it, is to regard it as a rent-charge upon the land in favour of the State. I do not think you can call it a tax in the same sense that one applies the word "tax" to impositions which are given for a period of years or renewed year by year. Land Tax now stands under the Act of 1797 and even then it was considered an old tax and one may regard it as rent-charge issuing out of the land in favour of the State. I think the Mover of this Amendment will agree that during the past few years, 30 years' purchase has been adopted in a good number of cases where sales of land have taken place, so if one regards the value of a rent-charge at the present time, 17 years would be by common consent much too short a period and it is much more likely that 30 years would be adopted.
I dare say my hon. and gallant Friend will differ from me, but if we were
bidding against each other for the purchase of rent-charge he would probably be able to go beyond me, and he would get very near 30 years. It is a well secured investment, and in these circumstances I think 30 years is not very far wrong. But supposing it be wrong I am quite satisfied that 17 years is too short. Whether we agree upon 25 years, 26 years and 27 years, or even up to 30 years if we are dealing with a rent-charge, I am quite certain that I am not far wrong in saying that 25 years to 30 years would be a right valuation at the present time, the only real reason for altering the period of 30 years laid down in the Act of 1896 is that either you deal with it on the basis as if it was tithe, which I venture to suggest is not an analogous case, or you may say you can invest your money on better terms at about 3½ per cent. The value of money from time to time changes. When this valuation of 30 years was inserted in the Act of 1896 it was an agreed number of years put in which possibly displeased some and pleased others, but there it stands as the measure of the value of the rent-charge. I do not think any case at the present time could be made out for altering the value of that rent-charge, and certainly not of reducing it to the period of 17 years suggested in the Amendment, and for the reasons which I have endeavoured to express as shortly as I can, I am afraid I am unable to accept the Amendment.

Mr. PRETYMAN: I really must traverse with great diffidence the suggestion of the Solicitor-General. My hon. and learned Friend does really seem to me to forget what Land Tax is. The Land Tax is not a rent charge at all. It is a quota levied, not upon any particular land; it is a quota levied upon a parish as a whole, and that particular sum is one distributed annually amongst all the land in that parish liable to Land Tax. All land in that parish is presumed to be liable to Land Tax until it has been redeemed, and the reason Land Tax is redeemed is not because it is the ordinary question of redeeming a rent charge which is paid over in the ordinary way; it is because if that land is going to be put to some more valuable use, such as building, its quota would be largely increased. Therefore before the purpose to which the land is to be used is altered
it is customary to redeem it. Otherwise the charge might be doubled, trebled, or quadrupled, and for that very purpose you have the right to redeem, because what really should govern the redemption is the value of money at the time, and the reason 30 years is fixed is not so much analogous with the tithe as that. 30 years' purchase does fairly represent the value of money. Now 17 years' purchase much more nearly represents the value of money. Money was then about 3 per cent., and now it is 6 per cent. I do not agree with my hon. and learned Friend that 17 years' purchase proposed is rather too few years to take. If the Chancellor of the Exchequer will say he will consider the matter before Report, and look at it from that point of view, and give us something less than 30 years, I for one would be satisfied.

4.0 A.M.

Sir E. POLLOCK: May I say a word in reply. The hon. and gallant Member would not really suggest that I really do not understand what the land tax is, that it is not a charge upon the parish, and so on. I am glad to hear any explanation he has got to give me. I did not say it was a rent charge, but it ought to be treated as analogous to a rent charge in favour of the State and treated from that point of view as a sum paid yearly which is secured very fully in its favour. It is upon the ground of analogy that I speak of it as a rent charge. Supposing, for instance, there is a plot of land, say, at the annual value of about £5, and some buildings are put up of the annual value of £150, then the exact equivalent would be this. The landowner before proceeding to build would redeem the land tax at the cost of £7 10s. Taking the test, therefore, that the right hon. Gentleman has made I think the present system works out fairly exactly and I cannot accept the Clause.

Question, "That the Clause be read a Second time," put, and negatived.

NEW CLAUSE.—(Payment of Super-tax by instalments.)

The provisions of Sub-section (1) and of paragraphs (a) and (c) of Sub-section (2) of Section one hundred and fifty-seven of the Income Tax Act, 1918 (which relates to the date when the payment of Income Tax shall become due and provides for the payment of Income Tax by instalments in certain cases), shall apply to the case of Super-tax charged under Part II of the Income Tax Act, 1918, as they apply to the cases mentioned in paragraph (b) of Sub-section (2) of that Section, and the provisions of the Income
Tax Act, 1918, applied for the purposes of the collection and recovery of Super-tax by Sub-section (6) of Section seven of that Act shall be read and construed with the necessary modifications accordingly.—[Sir B. Stanier.]

Brought up, and read the First time.

Sir B. STANIER: I beg to move "That the Clause be read a Second time."
This is another Clause that I have been asked to move by the Land Owners' Association. The effect of it is that we ask that Super-tax may be divided and paid in two instalments in the same way as Income Tax is paid.

Sir R. HORNE: The proposal is one with which I have great sympathy and in ordinary times I would be very ready to meet the desire which the hon. Member has expressed. But the times are not ordinary and the effect of accepting this proposal would be that I should lose £20,000,000 in the course of the current year's revenue.

Sir B. STANIER: It would not be lost. Payment would be postponed.

Sir R. HORNE: Certainly postponed, but it is almost as bad to postpone payment at the moment as it is to lose it altogether; at any rate the obligations of the present year are such that one cannot take into account the possibility of the postponement of revenue of so large an amount. Reference has been made to the payment of Income Tax in two instalments. That was done at a time when the Income Tax was being raised, and therefore, while there was an immediate loss it was at a time when taxation was increasing and there was an increase in revenue. It was possible to do that in those circumstances. While I have every sympathy with the Motion I am afraid that my poverty and not my will prevents me accepting it on this occasion.

Question "That the Clause be read a Second time," put, and negatived.

NEW CLAUSE.—(Allowance for expenses (clergymen) in certain cases (Schedule E).)

If an incumbent makes payments to a lay assistant which are certified by the bishop of the diocese as necessarily incurred by him in carrying out the duties of his office, he shall be allowed to deduct such payments from the amount of his assessable income.—[Major Birchall.]

Brought up, and read the First time.

Major BIRCHALL: I beg to move, "That the Clause be read a Second time."
Under the present law, if an incumbent employs a curate, he is entitled to deduct the Income Tax on the amount that he pays him, but if the same incumbent employs a lay assistant he is not entitled to any deduction. We want the lay assistant to be put in the same position as a curate in this matter, so that Income Tax can be deducted in respect of the amount paid. This matter was considered by the Royal Commission on Income Tax, and they unanimously recommended that this concession be granted. It is a very small matter, and I hope the Chancellor of the Exchequer may be able to grant the concession. It affects a large number of very poor clergy who already have more than they can do to live on their income.

Sir R. HORNE: I am sorry I cannot accept the proposal as it is made. Perhaps at another time my hon. Friend may be able to make it in a form more acceptable. As the proposition is put, it involves that a distinction now left to the Commissioners of Inland Revenue shall be transferred to the bishop of the diocese, not with regard to the licensing of a particular person in respect of whom the deduction is asked, but in respect of the allowance to be made. That obviously is a distinction which can never be handed over by the Inland Revenue to any ecclesiastical dignitary, however eminent.

Question, "That the Clause be read a Second time," put, and negatived.

NEW CLAUSE.—(Allowances for expenses (clergymen) in certain cases (Sche-E).)

If an incumbent is liable to repay annual instalments to Queen Anne's Bounty in respect of a loan granted to his predecessor for the purpose of the repair or restoration of his dwelling-house he shall be allowed to deduct such instalments from the amount of his assessable income.—[Major Birchall.]

Brought up, and read the First time.

Major BIRCHALL: I beg to move, "That the Clause be read a Second time."
Here, again, the proposal was recommended by the Royal Commission. The position is this, that an incumbent frequently comes into a benefice on which is charged a mortgage which has been raised
by a previous incumbent, and the mortgage is repayable by annual instalments of capital and interest. We ask that he may be allowed to deduct the amount of the repayment from his Income Tax assessment.

Mr. YOUNG: I am afraid it is not possible to accept this Amendment. It is a small Amendment, but it hits up against a big principle. To admit reductions of annual instalments in the case of Queen Anne's Bounty would be contrary to the principle upon which the whole Income Tax is based, that no allowance must be made from income by way of exemption to tax in respect of capital outlay or repayment of capital. As to the hardship of the present incumbent being assessed in respect of a loan of a predecessor, the incumbent must have taken that into account when he accepted the position.

Question, "That the Clause be read a Second time," put, and negatived.

NEW CLAUSE.—(Provision as to determination of claims for relief in respect of Dominion Income Tax.)

(1) Notice of any claim for relief under Section twenty-seven of the Finance Act, 1920 (which gives relief from United Kingdom Income Tax in respect of Dominion Income Tax), together with particulars of the claim, shall he given in writing to the Surveyor of Taxes or, in the case of a claim made by a person who is not resident in the United Kingdom, to the Commissioners of Inland Revenue, and where an objection is made to the claim by the Surveyor or Commissioners, as the case may he, the Special Commissioners shall hear and determine the claim in like manner as in the case of an appeal to them against an assessment under Schedule D and the provisions of the Income Tax Acts relating to such an appeal (including the provisions relating to the statement of a case for the opinion of the High Court on a point of law) shall apply accordingly with any necessary modifications.

(2) The Special Commissioners in determining a claim under the said Section twenty-seven shall have power to determine the rate at which relief is to he given and the amount of the relief to he given, and all questions whatsoever incidental to the determination of the matters as aforesaid.

(3) The provisions of this Section shall apply to any claims under Section forty-three of the Finance Act, 1916, or Section fifty-five of the Income Tax Act, 1918, which have not been finally determined at the commencement of this Act, as those provisions apply to claims under the said Section twenty-seven—[Captain Bowyer.]

Brought up, and read the First time.

Captain BOWYER: I beg to move, "That the Clause be read a Second time."
The Clause proposes to amend Section 27 of last year's Finance Act, which gives relief in claims for double Income Tax, and although it is the intention undoubtedly of the Act last year, that when the taxpayers want to come before the Treasury Commissioners to make their claims for this relief they should have the right to do so, it has been recently held by the Treasury Commissioners that the law does not grant the taxpayer the right to do this. This new Clause would give the taxpayer the right to do so. Undoubtedly he should have the right to go before the Commissioners and state his case, and, on a question of law, take the matter, on appeal, to the Courts.

Sir R. HORNE: I will accept the new Clause.

Clause read a Second time, and added to the Bill.

NEW CLAUSE.—(Amendment of 10 Edw. VII., c. 8, s. 48.)

Section 48 of the Finance (1909–10) Act, 1910 (which provides for a duty on purchases of intoxicating liquor to be supplied in a club), shall have effect as if "fourpence halfpenny" were therein substituted for "sixpence."—[Sir J. Butcher.]

Brought up, and read the First time.

Sir J. BUTCHER: I beg to move, "That the Clause be read a Second time."
The object of the Clause is to relieve a very definite and a very serious hardship in the way of taxation which falls on clubs. The clubs which I have more particularly in my mind are the very large and increasing number of working-men's clubs in the country. The way in which the tax operates is this. By the historic Budget of 1910 a tax of 6d. in the £ was imposed on the cost of intoxicating liquor supplied to clubs. That may or may not have been right, but as a matter of fact at that time it was a comparatively small burden on the clubs. The average amount which it placed on each club in an average year was about £7 or £8. That went on until the year 1914. Since then the burden of the tax has been growing by leaps and bounds, so much so that, in the present year, the average amount
paid per club in this country per annum in respect of that tax is about £40.
The Committee may well ask what is the reason for this enormous increase in the tax? One might imagine that it is due to increased consumption of liquor per member. But it is nothing of the sort. As a matter of fact, I have statistics to show that the amount of intoxicating liquor consumed per man in these working-men's clubs is less now than it was in 1910. The real reason why this burden is so enormously increased is because the tax on the liquor has increased, and the cost of the liquor has increased. The tax on the liquor has increased enormously—three or four times—and you have this extraordinary result, that the man who drinks liquor in clubs has to pay more for his liquor on account of the increased tax, and then he has to pay, or the club has to pay, a very much larger sum in respect of the 6d. in the £ on the cost of the liquor, because the cost of the liquor has increased so greatly by the amount of this tax. So that a man has to pay a tax upon a tax, not only upon the liquor itself—possibly if it were good enough he might pay that tax—but he is paying a tax upon this enormously increased tax imposed by the Exchequer. I would ask my right hon. Friend whether there is any precedent for a tax of that sort; first of all for the Exchequer to impose a tax on the article and then to ask the consumer of that article to pay a further tax upon the tax he has already paid? I believe that it is a totally new principle in taxation. I have never seen it before and I doubt if anyone else has ever heard of it before. But what a monstrous principle it is! It is as if the Chancellor of the Exchequer were to say, "I will put up the tax on the article itself from 1s. to 5s. and then I have this increased tax on the person who consumes the article of an additional 4s." Surely that is not right.
It is sought to justify this tax by saying that public-houses pay a somewhat smaller amount in licensing. That is a matter for argument which I do not propose to go into to-night. It can be shown that this tax on liquor consumed in the clubs is quite as much as or rather more, than the tax on the liquor consumed in the public-house. I am not arguing on that footing, but simply on the footing that when this 6d. in the £ was imposed
in 1910, no one could ever have contemplated that the imposition of that tax would have such an effect as it has to-day, and if it was reasonable in 1910 it certainly is wrong now, owing to the increased tax on the liquor itself. I am making an exceedingly moderate proposal in my Amendment. I suggest that instead of the 6d. charge there should be a charge of 4½d. in the £. I might have asked the Chancellor of the Exchequer to reduce it to 1d. or 2d., but owing to the state of the Exchequer I am only asking him to reduce it to 4½d. The sum which would be lost to the revenue is only £76,000 in all. Therefore I really do ask him to accept this as an act of mere reasonable justice.

Sir E. POLLOCK: The hon. and learned Member pleads very hard and is very convincing. He asks that his Amendment should be accepted as a mere act of justice, and he does not base his argument on any question of clarity of taxation between clubs and public-houses, but he merely cites an historical argument. He says that if in 1910 it had been realised that this tax would have risen so much it ought never to have been put on.

Sir J. BUTCHER: My hon. and learned Friend must not misinterpret me. I said that assuming it was right in 1910 it was totally wrong now, owing to the increased taxation on liquor.

Sir E. POLLOCK: I apologise to my hon. and learned Friend if I misunderstood him. I am going to plead what I think is really the only justification for a tax at all, and that is that the State wants the money. I do not think it is possible to justify putting on a tax in cases of this sort merely for the sake of putting taxes on. One has to justify it on the ground of the needs of the State. Otherwise I should be very glad to remove this and a great many other taxes. The hon. and learned Member has given a figure which my right hon. Friend the Chancellor of the Exchequer understands is too low. It is estimated that the sum involved is £95,000, which is not an inconsiderable sum at the present time.
I want to say a word or two upon the broader lines, because the hon. and learned Member has argued on very fair lines. We all wish, if we can, to enhance the prosperity of clubs. I think we are
all interested in them. We all know they do much good, and we all wish to advance the whole system of clubs. That would be common ground amongst all Members of the Committee in all parts of the House. I hope to approach the question from that point of view, at the same time keeping revenue and maintaining revenue, as the Chancellor of the Exchequer has nothing to give away at the present time. I do not think that it is wholly irrelevant if we consider whether the situation in which these clubs are placed is better or worse than the licensed house. They may be standing on very different platforms, but I think it is right to make a contradistinction if one is to keep, and get, a general perspective of the liquor taxes in the field of liquor control. At the present time the licence holders suffer a taxation considerably more severe than do clubs. In answer to a question the figures were given to the House the other day by the Financial Secretary to the Treasury. To that extent clubs do enjoy a privilege and advantage over the public-house. Although the hon. and learned Member may desire to ask for more, I think we must maintain the present scale as between these two classes of premises, and having regard to the amount involved I think it is quite impossible to make a concession which would still further grant privilege to clubs. I am sure that their members are aware of the importance of contributing to the necessities of the State at a time when we have to meet the great burdens of the War.

Mr. LANE-FOX: I wish the right hon. Gentleman would contribute, intellectually, a little more to justify this extraordinary system of taxation which has no precedent and certainly requires more investigation than it has received from the hon. and learned Solicitor-General. In 1914 the Club Tax was only £63,000. It is £383,000 this year, whereas the tax on licences is rather less this year than in 1914. No one can compare the condition and standing of clubs of respectable British working men with public-houses. Surely it is unfair for the hon. and learned Solicitor-General to have done so—

Sir E. POLLOCK: I am sure the hon. Member cannot say I made that comparison. I particularly said I had to consider the matter all round. I had to take
into consideration what was paid in places where liquor was consumed. It would be quite unfair to me to quote my words in the sense of making a comparison between public-houses and clubs.

Mr. LANE-FOX: I certainly would not wish to be unfair to the Solicitor-General. At the same time I very much regret the answer which the Government has given.

Sir F. YOUNG: I regret that the Solicitor-General has not been able to meet the request of my hon. Friend in this new Clause. The very great increase in the taxation of clubs is entirely incidental and is not deliberate taxation put on by this House. I am quite sure that when we increased from time to time the tax on liquor, it was not contemplated that it was going to have the extra effect this taxation on taxation has involved. Members are familiar with the figures which have been given. As regards clubs generally, they are a little misleading, as there are many trifling clubs selling liquor for portions of the year which make the average very low. If we consider the working men's clubs, the average payment under this taxation has risen to an extreme figure. I have instances in my own district where the tax has risen from £30 to £130 without increased drinking, but rather due to the excessive cost of liquor, which is mainly due to the tax upon it. Whilst we are apparently in agreement that we cannot compare the position of clubs and licensed premises, we can take the Solicitor-General's point that we have to survey the field of liquor taxation. There is a very interesting fact, and that is that the taxation of hotels has not increased, in the average, during this period, whereas in the case of clubs it has increased to the extent which has been pointed out. If, therefore, we are to maintain the equilibrium between clubs and licensed premises, I think we have a strong case in asking the Treasury to make the reduction suggested by this Amendment. I hope we will go to a Division upon this. The appeal to the Government is founded on justice as opposed to a wrong principle—taxation upon taxation.

Captain BOWYER: I am dissatisfied with the answer of the learned Solicitor-General, especially with his remarks upon the general perspective of the case. I would like to call his attention to the general perspective as between 1914 and 1921. The tax paid by licence-
holders is less than in 1914. The tax paid by clubs is greater than it was in 1914. I hold a letter in my hand from a working-man's club—one of many in my constituency which gives the actual figure for this year. The amount spent in the purchase of drink was £9,235, and the tax amounted to £230 17s. 6d. I do think that these figures show that a very undue burden is placed on them.

Sir J. BUTCHER: I was greatly pleased with the speech of the learned Solicitor-General and greatly disappointed with his decision. I was pleased with the speech because it could give no reason for the continuance of this tax, and I was disappointed with his conclusion because he has decided to continue it. I know him so well that I am sure that if there had been any justification for a continuance of the tax he would have put it forward. I challenged him to give any case in which a tax had been put upon a tax. I said it was unprecedented, and he did not deny it. The only reason that he gave for continuing the tax was that he had got it, and did not like to give it up. That is the argument of the dog with a pound of butter in his mouth. If my hon. and learned Friend insists on retaining a tax of this sort, which is wholly unjustifiable, then it will make this House all the more cautious in granting him taxes which cannot be justified, and which are used for purposes that were never intended. I beg the Chancellor of the Exchequer to

try either now, or to give some undertaking as between now and the Report, to consider it, and give some relief which will concede the principle for which we are asking.

Sir R. HORNE: I would beg the Committee not to press me too far on this matter. The House is constantly urging on the Government to restrict expenditure and to save money, and this proposal is really to take away £95,000 a year of money which is very badly required. The tax at the moment, so far as one can gather, is one which is, no doubt, burdensome. But so are all taxes. You must anticipate that if club taxation is reduced public-house taxation will have to be reduced, and even now the taxation paid by the public-house is greater than that paid by the club. You have to keep these things in mind, and when the country is so' badly in need of money as it is, to sacrifice £95,000 is more than I can consent to at the present time. I urge the Committee not to press it.

Major WHELER: Can the right hon. Gentleman give some promise to consider the lightening of this taxation next year?

Sir R. HORNE: Certainly; I should be pleased to consider the lightening of taxation all round.

Question put, "That the Clause be read a Second time."

The Committee divided: Ayes, 24; Noes, 77.

Division No. 190.]
AYES.
[4.37 a.m.


Atkey, A. R.
Foxcroft, Captain Charles Talbot
Lyle, C. E. Leonard


Bell, Lieut.-Col. w. C. H. (Devizes)
Ganzoni, Sir John
Ormsby-Gore, Hon. William


Bellairs, Commander Carlyon W.
Glanville, Harold James
Seddon, J. A.


Benn, Capt. Sir I. H., Bart. (Gr'nw'h)
Goff, Sir R. Park
Wheler, Col. Granville C. H.


Betterton, Henry B.
Gould, James C.
Wills, Lt.-Col. Sir Gilbert Alan H.


Bowyer, Captain G. W. E.
Green, Joseph F. (Leicester, W.)
Young, Sir Frederick W. (Swindon)


Bruton, Sir James
Hannon, Patrick Joseph Henry



Cope, Major William
Hennessy, Major J. R. G.
TELLERS FOR THE AYES.—


Davies, Thomas (Cirencester)
Hopkins, John W. W.
Sir John Butcher and Mr. Lane-




Fox.


NOES.


Agg-Gardner, Sir James Tynte
Chamberlain, Rt. Hn. J. A. (Birm. W.)
Hacking, Captain Douglas H.


Amery, Leopold C. M. S.
Chamberlain, N. (Birm., Ladywood)
Hailwood, Augustine


Armitage, Robert
Colvin, Brig.-General Richard Beale
Harmsworth, C. B. (Bedford, Luton)


Bagley, Captain E. Ashton
Conway, Sir W. Martin
Henderson, Major V. L. (Tradeston)


Baird, Sir John Lawrence
Coote, Colin Reith (Isle of Ely)
Holbrook, Sir Arthur Richard


Baldwin, Rt. Hon. Stanley
Curzon, Captain Viscount
Holmes, J. Stanley


Balfour, George (Hampstead)
Davidson, J. C. C. (Hemel Hempstead)
Hope, Lt.-Col. Sir J. A. (Midlothian)


Barlow, Sir Montague
Elliot, Capt. Walter E. (Lanark)
Home, Sir R. S. (Glasgow, Hillhead)


Barnett, Major Richard W.
Evans, Ernest
Hotchkin, Captain Stafford Vere


Barnston, Major Harry
Eyres-Monsell, Com. Bolton M.
Hunter, General Sir A. (Lancaster)


Birchall, Major J. Dearman
Falle, Major Sir Bertram Godfray
Jameson, John Gordon


Boscawen, Rt. Hon. Sir A. Griffith-
Ford, Patrick Johnston
Kellaway, Rt. Hon. Fredk. George


Briggs, Harold
Fremantle, Lieut.-Colonel Francis E.
Kidd, James


Brown, Major D. C.
Gibbs, Colonel George Abraham
King, Captain Henry Douglas


Buckley, Lieut.-Colonel A.
Gilmour, Lieut.-Colonel Sir John
Lindsay, William Arthur


Carr, W. Theodore
Greene, Lt.-Col. Sir W. (Hackn'y, N.)
Lloyd-Greame, Sir P.


Locker-Lampson, Com. O. (H'tingd'n)
Roberts, Samuel (Hereford, Hereford)
Thomson, T. (Middlesbrough, West)


Mallalieu, Frederick William
Robinson, S. (Brecon and Radnor)
Thomson, Sir W. Mitchell- (Maryhill)


Moore-Brabazon, Lieut.-Col. J. T. C.
Samuel, Samuel (W'dsworth, Putney)
Tryon, Major George Clement


Neal, Arthur
Sanders, Colonel Sir Robert Arthur
Ward, William Dudley (Southampton)


Newman, Sir R. H. S. D. L. (Exeter)
Shaw, Hon. Alex. (Kilmarnock)
Weston, Colonel John Wakefield


Parker, James
Shaw, Capt. William T. (Forfar)
White, Col. G. D. (Southport)


Parry, Lieut.-Colonel Thomas Henry
Sprot, Colonel Sir Alexander
Young, E. H. (Norwich)


Pollock, Sir Ernest Murray
Stanier, Captain Sir Beville



Pownall, Lieut.-Colonel Assheton
Stanley, Major Hon. G. (Preston)
TELLERS FOR THE NOES.—


Pretyman, Rt. Hon. Ernest G.
Sutherland, Sir William
Colonel Leslie Wilson and Mr.


Purchase, H. G.
Thomson, F. C. (Aberdeen, South)
McCurdy.


Question, "That the Clause be read a Second time," put, and agreed to.

NEW CLAUSE.—(Amendment of Section 16 of the Finance Act, 1919.)

The exemption from Income Tax granted by Section sixteen of the Finance Act, 1919, in respect of income from wounds and disability pensions shall be extended to the income from pensions granted to widows of members of the naval, military, or air forces of the Crown.—[Mr. Trevelyan Thomson.]

Brought up, and read the First time.

Mr. T. THOMSON: I beg to move, "That the Clause be read a Second time."
As the Committee will be aware, the Finance Act exempts from Income Tax pensions granted to ex-service men for disability or for wounds, and the Amendment I propose to move is that the same concession should be granted to the widows of ex-service men who are granted pensions for similar reasons. It seems to me that if it was sound in 1919 that these pensions should be exempt from Income Tax, it is equally sound that pensions for war obligations granted to the widows of ex-service men should also be exempt. I do not know whether the times in 1919 were more sympathetic than the times to-day. I do not want to labour the question at this early hour of the morning, but I do submit that logically what is good for war obligation to the man is equally good as war obligation to the woman. The Government in resisting previous Amendments have said they were sympathetic in many cases, but the sum involved was large, and therefore they had to harden their hearts. In others the sum involved was small but the principle was not sound. I submit that this small Clause of mine does not conflict with either of the objections. The amount at stake must indeed be very small and the principle, which is great, is, I submit, sound. Therefore I do hope, seeing that the amount involved is only small, the Government might show that they have not lost all sympathy and kindness of heart and make this very small concession as a war obligation to the widows of those who have fallen in the late War.

Sir R. HORNE: I am sorry I cannot accept the proposal my hon. Friend has made. The analogy of the man who receives a wound and who gets compensation with that of the widow who is receiving a pension is not at all convincing or complete. In the one case you have something analogous to the Workmen's Compensation Act; in the other case you have what is a pure pension. The inequity of the proposal could be illustrated as follows: The greater benefit would go to the person who deserves it less. Take the case of two widows, one of whom is not liable to Income Tax at all. She gets nothing in compensation or in addition. Take the other widow who is liable to Income Tax, she is the only person who gets the concession.

Question, "That the Clause be read a Second time," put, and negatived.

NEW CLAUSE.—(Objects of national, scientific, historic, and artistic interest to be exempt from death duties if sold to national or public institutions.)

Notwithstanding anything in Section twenty of the Finance Act, 1896 (which, as amended by Section sixty-three of the Finance (1909–10) Act, 1910, gives exemption from Estate Duty, Legacy Duty, and Succession Duty to objects of national, scientific, historic, and artistic interest so long as they remain unsold), or in the said Section sixty-three, duty shall not become chargeable on the sale, after the passing of this Act, of any property in respect of which exemption has been allowed under those Sections if the sale is to the National Gallery, British Museum, or other similar national institution, any university, any county council, or any municipal corporation in the United. Kingdom.—[Sir Martin Conway.]

Brought up, and read the First time; read a Second time, and added to the Bill.

NEW CLAUSE.—(Compensation under Part II of Agriculture Act, 1910, to be regarded as cost of management.)

Any compensation which is payable under Part II of the Agriculture Act, 1920, shall be regarded as part of the cost of management under Section sixty-nine of the Act of 1910.—[Mr. Pretyman.]

Brought up, and read the First time.

Mr. PRETYMAN: I beg to move, "That the Clause be read a Second time."
Where on account of a notice given to a tenant to quit for proper and legitimate reasons under Part II of the Agriculture Act the rent has to be returned, it is obvious that the landlord ought not to have to pay Income Tax on a rent he does not actually receive. All I propose is that, where that arises and the rent has to be given back to the tenant because the tenant has quitted the farm, that is part of the cost of management and ought to be one of the expenses which should be deducted. May I say that I could not expect a manuscript Amendment of this kind to be actually accepted by my right hon. Friend without some consideration and looked carefully into? If he will undertake to look into the matter before the Report stage of the Bill I shall be satisfied.

Sir R. HORNE: I am afraid that I cannot give the undertaking for which my right hon. Friend asks.

Mr. PRETYMAN: I beg leave to withdraw the Clause.

Motion and Clause, by leave, withdrawn.

NEW CLAUSE.—(Rate of Stamp Duty under 42 & 43 Vic, c. 6.)

(1) The Stamp Duty charged on local authorities by the District Auditors Act, 1879, as amended by any other Act, in respect of the audit of their accounts by district auditors, shall, instead of being calculated according to the scale contained in the First Schedule to that Act, be calculated according to a scale to be fixed from time to time by the Treasury after consultation with the Minister of Health, and the scale so fixed shall be such as to secure that the duties levied under the said Act shall be sufficient to meet the costs incurred, in respect of the remuneration including superannuation allowances, and the expenses, of district auditors.

(2) The Treasury may, after consultation with the Minister of Health, direct that the Stamp Duty charged under the said Act shall, in the case of any particular local authority, istead of being an amount calculated according to the scale to be fixed under this Section, be such an amount, not exceeding the amount chargeable under the scale, as the Treasury think fit having regard to the cost of the audit of the accounts of that authority.—[Sir It. Horne.]

Brought up, and read the First time.

Sir R. HORNE: I beg to move, "That the Clause be read a Second time."
The purpose of this Clause is to bring the scale of charges in connection with local audits into relation with present-day costs. The Treasury has now to bear one-half of the cost, and the Clause which I now submit is to make it possible for a scale of charges to be drawn up by the Treasury, in consultation with the Ministry of Health, to meet present-day salaries and the necessary expenses incurred by the auditors in the discharge of their duties.

Clause read a Second time, and added to the Bill.

Motion made, and Question, "That the Chairman do report Progress, and ask leave to sit again," put, and agreed to.—[Sir B. Horne.]

Committee report Progress; to sit again To-morrow (Wednesday).

The remaining Orders were read, and postponed.

It being after half-past Eleven of the Clock upon Tuesday evening, Mr. DEPUTY-SPEAKER adjourned the House, without Question put, pursuant to the Standing Order.

Adjourned at Five Minutes before Five o'clock a.m.